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Is policy pilot a viable path to sustainable development? Attention allocation perspective

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  • Dai, Jiapeng

Abstract

Policy pilot programs are gaining attention as innovative governance to encourage sustainable development. However, their effectiveness and influencing factors are debated, while the impact of these pilots under varying concentrations of societal attention is underexplored. This study examined whether policy pilots can aid in sustainable development by investigatingChina's carbon emissions trade pilot policy (COTPP), a market-driven environmental regulation. Using a difference-in-differences methodology, we analyzed 13,559 firm–year observations spanning 2011–2021 to assess the policy's impact on corporate carbon emissions. The empirical findings indicate that COTPP implementation significantly reduced corporate carbon emissions. There were heterogeneous effects spanning organizational and regional contexts. The emission reduction effect was more distinct for state-owned enterprises (SOEs) than non-SOEs and firms located in the economically developed eastern region relative to those in the central and western regions. Moreover, attention allocation—established through governmental, public, and media engagement—was a critical moderating factor.The moderating effect is strongest for government attention, followed by public attention, with media attention showing the weakest yet still significant effect. Integrating organizational heterogeneity and an attention allocation framework advanced the theoretical understanding of policy pilot effectiveness, providing practical insights for designing market-based environmental regulations. These findings augment environmental governance research and policy implementation practice by elucidating how contextual factors and informal institutional engagement can be leveraged to strengthen sustainable development.

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  • Dai, Jiapeng, 2025. "Is policy pilot a viable path to sustainable development? Attention allocation perspective," International Review of Financial Analysis, Elsevier, vol. 98(C).
    • Handle: RePEc:eee:finana:v:98:y:2025:i:c:s1057521925000109
    DOI: 10.1016/j.irfa.2025.103923
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    1. Li, Pengcheng & Guo, Xiaochuan & Wang, Fengzheng & Zhang, Qifeng, 2025. "Digital transformation and corporate innovation boundaries: Role of supply chain concentration and transparency," International Review of Financial Analysis, Elsevier, vol. 98(C).

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    More about this item

    Keywords

    Policy pilot; Sustainable development; Carbon emissions trading; Environmental regulation; Attention allocation; Informal institution;
    All these keywords.

    JEL classification:

    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies

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