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How does the Paris Agreement affect firm productivity? International evidence

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  • Pang, Jing
  • Liu, Zhaoda
  • Hou, Wanyue
  • Tao, Yunqing

Abstract

Using the event study method, this study examines how the Paris Agreement affects firm productivity in the long and short term. With a sample of global listed firms from 2013 to 2020, we find that in the short term, the Paris Agreement has a negative "impact effect" on firms’ total factor productivity (TFP). However, in the long term, it shows a positive "optimization effect" on firms’ TFP. Furthermore, economic policy uncertainty and firms’ risks mediate the effect of the Paris Agreement on firms’ TFP in the short term; while green innovation mediates its effect in the long term.

Suggested Citation

  • Pang, Jing & Liu, Zhaoda & Hou, Wanyue & Tao, Yunqing, 2023. "How does the Paris Agreement affect firm productivity? International evidence," Finance Research Letters, Elsevier, vol. 56(C).
    • Handle: RePEc:eee:finlet:v:56:y:2023:i:c:s1544612323005226
    DOI: 10.1016/j.frl.2023.104150
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    Cited by:

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    3. Hu, Yuge & Dong, Yifei & Paraman, Pradeep, 2025. "Environmental responsibility governance: Local environmental legislation influence on corporate environmental investment decisions," Finance Research Letters, Elsevier, vol. 79(C).
    4. Fu, Haoliang & Li, Mao & Guo, Wenwei & Huang, Jinbo, 2025. "Digital transformation and carbon reduction: Evidence from Chinese listed companies," Finance Research Letters, Elsevier, vol. 83(C).
    5. Jia, Xiaofei & Zhang, Naiqian & Tong, Tong & Li, Yongna & Han, Ruixue, 2025. "Social networks, financial knowledge, and urban–rural family entrepreneurship," Finance Research Letters, Elsevier, vol. 76(C).
    6. Zhang, Ruifeng & Zhao, Lishuang & Song, Shuhong, 2024. "Does capital input contribute to green total-factor capital efficiency?," Finance Research Letters, Elsevier, vol. 62(PB).
    7. Liu, Zhonglu & He, Shuguang & Men, Wenjiao & Sun, Haibo, 2024. "Impact of climate risk on financial stability: Cross-country evidence," International Review of Financial Analysis, Elsevier, vol. 92(C).
    8. Reza Farzipoor Saen & Zohreh Moghaddas & Majid Azadi, 2025. "An advanced data analytic approach for reallocating green gas emissions in cap-and-trade context," Annals of Operations Research, Springer, vol. 355(1), pages 555-578, December.
    9. Fan, Xiaoyun & Shen, Xinyan & Wang, Daoping & Zhou, Cier, 2025. "The Paris Agreement and firms’ carbon information disclosure: Honesty or catering?," International Review of Economics & Finance, Elsevier, vol. 99(C).
    10. Gong, Xu & Fu, Chengbo & Li, Huijing & Pirabi, Mansoor, 2024. "The impact of U.S. political decisions on renewable and fossil energy companies in the era of the Paris Agreement," Finance Research Letters, Elsevier, vol. 69(PA).

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    • K33 - Law and Economics - - Other Substantive Areas of Law - - - International Law
    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility

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