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Do efforts on energy saving enhance firm values? Evidence from China's stock market

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  • Ye, Dezhu
  • Liu, Shasha
  • Kong, Dongmin

Abstract

This paper studies the impact of energy-saving efforts on firm value, using the carbon emission rights trading scheme (CERTS) of China as an exogenous shock. The results showed that the CERTS increases the market value of energy-related firms; moreover, the energy-saving efforts of firms further influence their market value and investor reaction. Energy-related firms improve their market value and gain benefits by strengthening their energy-saving activities. This paper offers an important policy implication that the Government should enact appropriate policies to improve the energy-saving activities of firms, especially in the energy industry.

Suggested Citation

  • Ye, Dezhu & Liu, Shasha & Kong, Dongmin, 2013. "Do efforts on energy saving enhance firm values? Evidence from China's stock market," Energy Economics, Elsevier, vol. 40(C), pages 360-369.
    • Handle: RePEc:eee:eneeco:v:40:y:2013:i:c:p:360-369
    DOI: 10.1016/j.eneco.2013.07.017
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    5. Zhao, Nan & Liu, Xiaojie & Zhang, Zizhe, 2022. "Does competition from the informal sector affect firms’ energy intensity? Evidence from China," Structural Change and Economic Dynamics, Elsevier, vol. 62(C), pages 130-142.
    6. Fu, Tong & He, Feng & Lucey, Brian, 2023. "Justice as efficiency: Courts and the allocation of electricity in China," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 84(C).
    7. Yilmaz Yildiz & Mehmet Baha Karan, 2020. "Environmental policies, national culture, and stock price crash risk: Evidence from renewable energy firms," Business Strategy and the Environment, Wiley Blackwell, vol. 29(6), pages 2374-2391, September.
    8. Wang, Caiping & Dai, Shanshan & Xu, Honggang, 2018. "Estimating the land opportunism of hotel investment in generating real estate appreciation and firms’ market value," Land Use Policy, Elsevier, vol. 77(C), pages 752-759.
    9. Safiullah, Md & Kabir, Md. Nurul & Miah, Mohammad Dulal, 2021. "Carbon emissions and credit ratings," Energy Economics, Elsevier, vol. 100(C).

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    More about this item

    Keywords

    Energy saving; Firm values; Event study; Emerging market;
    All these keywords.

    JEL classification:

    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy

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