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Does performance of carbon neutrality affect firm value?

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  • Wu, Hao
  • Song, Yunling

Abstract

Carbon neutrality is critical in addressing the climate crisis. Using the data of Chinese listed firms from 2018 to 2022, this paper shows a significant U-shaped association between the performance of carbon neutrality and firm value. Our key findings hold after a battery of robustness tests and endogeneity concerns. The U-shaped relationship is weaker in state-owned firms and those operating in B2C industries, and stronger when information uncertainty is higher. This paper has implications for the promotion of carbon-neutral practices in enterprises and the realization of sustainable development.

Suggested Citation

  • Wu, Hao & Song, Yunling, 2024. "Does performance of carbon neutrality affect firm value?," Finance Research Letters, Elsevier, vol. 63(C).
    • Handle: RePEc:eee:finlet:v:63:y:2024:i:c:s1544612324004136
    DOI: 10.1016/j.frl.2024.105383
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    References listed on IDEAS

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    1. Lv, Jiamin & Li, Shi & Zhu, Mengying & Huang, Wenli, 2024. "Can the digital economy development limit the size of the informal economy? A nonlinear analysis based on China's provincial panel data," Economic Analysis and Policy, Elsevier, vol. 83(C), pages 896-921.
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    4. Song, Yunling & Xu, Chengying & Wei, Li, 2024. "External guarantees and ESG performance in China: Resource constraints or impression management?," International Review of Financial Analysis, Elsevier, vol. 96(PB).

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