IDEAS home Printed from https://ideas.repec.org/a/eee/finlet/v69y2024ipas1544612324010912.html

Carbon trading mechanism and industrial pollution behavior: A study based on regression discontinuity design analysis

Author

Listed:
  • Kong, Jiangwei
  • Gao, Mengxi

Abstract

This study investigates the impact of environmental regulations, specifically the carbon trading mechanism, on industrial pollution reduction. Framed within a comprehensive theoretical framework, the research hypotheses explore the influence of the carbon trading mechanism and its interaction with carbon emission trading scale on pollution reduction in industrial enterprises. The study employs Regression Discontinuity Design (RDD) and introduces control variables to provide a nuanced understanding of the relationships.Results indicate a significant impact of the carbon trading mechanism on pollution reduction. This study contributes to understanding the intricate relationships between policy implementation, trading scale, and industrial pollution reduction.

Suggested Citation

  • Kong, Jiangwei & Gao, Mengxi, 2024. "Carbon trading mechanism and industrial pollution behavior: A study based on regression discontinuity design analysis," Finance Research Letters, Elsevier, vol. 69(PA).
    • Handle: RePEc:eee:finlet:v:69:y:2024:i:pa:s1544612324010912
    DOI: 10.1016/j.frl.2024.106061
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1544612324010912
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.frl.2024.106061?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    References listed on IDEAS

    as
    1. Fu, Yang & Zheng, Zeyu, 2020. "Volatility modeling and the asymmetric effect for China’s carbon trading pilot market," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 542(C).
    2. Li, Youwei & Liao, Ming & Liu, Yangke, 2023. "How does green credit policy affect polluting firms' dividend policy? The China experience," International Review of Financial Analysis, Elsevier, vol. 88(C).
    3. Ke Zhang & Jing Qian & Zhenhua Zhang & Shijiao Fang, 2023. "The Impact of Carbon Trading Pilot Policy on Carbon Neutrality: Empirical Evidence from Chinese Cities," IJERPH, MDPI, vol. 20(5), pages 1-23, March.
    4. Xuehui Yang & Jiaping Zhang & Lehua Bi & Yiming Jiang, 2023. "Does China’s Carbon Trading Pilot Policy Reduce Carbon Emissions? Empirical Analysis from 285 Cities," IJERPH, MDPI, vol. 20(5), pages 1-24, March.
    5. Miaomiao Tao & Lim Thye Goh, 2023. "Effects of Carbon Trading Pilot on Carbon Emission Reduction: Evidence from China’s 283 Prefecture-Level Cities," Chinese Economy, Taylor & Francis Journals, vol. 56(1), pages 1-24, January.
    6. Kong, Dongmin & Liu, Chenhao, 2024. "Centralization and regulatory enforcement: Evidence from personnel authority reform in China," Journal of Public Economics, Elsevier, vol. 229(C).
    7. Liu, Yang Stephanie & Zhou, Xiaoyan & Yang, Jessica Hong & Hoepner, Andreas G.F. & Kakabadse, Nada, 2023. "Carbon emissions, carbon disclosure and organizational performance," International Review of Financial Analysis, Elsevier, vol. 90(C).
    8. Weng, Zhixiong & Liu, Tingting & Wu, Yufeng & Cheng, Cuiyun, 2022. "Air quality improvement effect and future contributions of carbon trading pilot programs in China," Energy Policy, Elsevier, vol. 170(C).
    9. Dong Ding & Bin Liu & Millicent Chang, 2023. "Carbon Emissions and TCFD Aligned Climate-Related Information Disclosures," Journal of Business Ethics, Springer, vol. 182(4), pages 967-1001, February.
    10. Ullah, Saif & Nobanee, Haitham & Iftikhar, Huma, 2023. "Global financial integration, governance-by-technology, and green growth," International Review of Financial Analysis, Elsevier, vol. 90(C).
    11. Zhang, Hui & Zhang, Bing, 2020. "The unintended impact of carbon trading of China's power sector," Energy Policy, Elsevier, vol. 147(C).
    12. Al-Fakir Al Rabab'a, Eltayyeb & Rashid, Afzalur & Shams, Syed, 2023. "Corporate carbon performance and cost of debt: Evidence from Asia-Pacific countries," International Review of Financial Analysis, Elsevier, vol. 88(C).
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Chen, Songyi & Fan, Qianqian, 2025. "Can market-based environmental regulation promote corporate intelligent transformation: Evidence from the carbon emission trading system," Finance Research Letters, Elsevier, vol. 76(C).
    2. Bian, Zhiqiang & Zhang, Caibin, 2025. "Do different decentralization reforms prohibit or inhibit Chinese corporate carbon emission intensities?," Economic Analysis and Policy, Elsevier, vol. 85(C), pages 1176-1196.
    3. Jiang, Ke & Xu, Liping & Zhang, Jiaming, 2025. "Carbon taxes vs. cap-and-trade: Do policy choices influence enterprise emissions dynamics and strategic responses?," Technological Forecasting and Social Change, Elsevier, vol. 220(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Goodell, John W. & Gurdgiev, Constantin & Karim, Sitara & Palma, Alessia, 2024. "Carbon emissions and liquidity management," International Review of Financial Analysis, Elsevier, vol. 95(PA).
    2. Huang, Ming & Wang, Xiaoxiao & Wang, Xuewu & Zhang, Qunzi, 2024. "Carbon risk and corporate maturity mismatch," Journal of International Money and Finance, Elsevier, vol. 149(C).
    3. Li, Mingchen & Li, Peigong & Zhu, Wanwan, 2025. "Greenhouse gas performance and disclosure-new global evidence," International Review of Financial Analysis, Elsevier, vol. 105(C).
    4. Florackis, Chris & Muktadir-Al-Mukit, Dewan & Sainani, Sushil & Zhang, Ziyang (John), 2025. "Stock market reaction to mandatory carbon disclosure announcements: The role of institutional investors," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 99(C).
    5. Acheampong, Albert & Wang, Yan, 2025. "Carbon reduction initiatives, firm innovation and firm value," Economics Letters, Elsevier, vol. 256(C).
    6. Si, Xiaohan & Zhang, Shuai, 2025. "Carbon emission disclosure and carbon premium ——evidence from the Chinese bond market," International Review of Economics & Finance, Elsevier, vol. 98(C).
    7. Md Safiullah & Linh Thi My Nguyen & Muhammad Nurul Houqe & Jonathan Batten, 2025. "Carbon assurance: Does it have an impact on credit ratings?," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 65(2), pages 2173-2210, June.
    8. Hoepner, Andreas G.F. & Schiemann, Frank & Schneider, Fabiola I. & Tietmeyer, Raphael, 2025. "ESG disclosure as advertisement of corporate bond issuances," International Review of Financial Analysis, Elsevier, vol. 106(C).
    9. Chai, Shanglei & Zhou, Qianqian & Ji, Qiang & Liu, Zuankuo & Liu, Changyu & Chu, Wenjun, 2025. "Inhibition or inducement? The impact of carbon emissions trading scheme (ETS) on corporate earnings management from the perspective of public pressure," International Review of Financial Analysis, Elsevier, vol. 101(C).
    10. Huang, Zhehao & Su, Yaya & Zhao, Yuanqi, 2025. "Carbon emissions reduction: Crowding out or feeding back on corporate profitability?," Finance Research Letters, Elsevier, vol. 74(C).
    11. Yizhou Wang & Siyu Shen & Jun Xie & Hidemichi Fujii & Alexander Ryota Keeley & Shunsuke Managi, 2024. "How corporate climate change mitigation actions affect the cost of capital," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 31(6), pages 5139-5154, November.
    12. Lee, Gunhee & Bae, Mincheol & Sohn, Joongchan & Han, Chanwoo & Cho, Jinhyung, 2024. "Does voluntary environmental information disclosure prevent stock price crash risk? – Comparative analysis of chaebol and non-chaebol in Korea," Energy Economics, Elsevier, vol. 131(C).
    13. Dong, Hao & Li, Chengcheng & Wang, Xiaoqiong, 2025. "Friendly press, fading greens: The effect of media connection on firm greenwashing," Global Finance Journal, Elsevier, vol. 68(C).
    14. Liang, Shuhan, 2025. "An analysis of how work stress affects employees' proactive work behavior: The moderating role of corporate financial support," Finance Research Letters, Elsevier, vol. 85(PD).
    15. Li, Li & Zhang, Ruiqi & Zhang, Yongxue, 2026. "Environmental information disclosure, carbon market policy, and corporate value: A policy synergy perspective," International Review of Financial Analysis, Elsevier, vol. 109(C).
    16. Ma, Anmiao, 2025. "Relationship between carbon disclosure quality, green innovation and organizational performance under the background of carbon neutrality," Finance Research Letters, Elsevier, vol. 82(C).
    17. Yin, Nan & Zhu, Yingming, 2024. "Investigating investor attention to carbon risk from a supply chain perspective," International Review of Financial Analysis, Elsevier, vol. 96(PA).
    18. Sun, Lu & Zhou, Haizhen & Huang, Feng, 2025. "How the introduction of the “Dual Carbon” targets drives ESG disclosure in manufacturing enterprises?," International Review of Economics & Finance, Elsevier, vol. 101(C).
    19. Zhang, Ruifeng & Song, Shuhong & Xiu, Weiya, 2025. "Does the efficiency of capital allocation have spatial carbon emission spillover effects?," International Review of Financial Analysis, Elsevier, vol. 99(C).
    20. Wang, Zongrun & Fu, Haiqin & Ren, Xiaohang & Gozgor, Giray, 2024. "Exploring the carbon emission reduction effects of corporate climate risk disclosure: Empirical evidence based on Chinese A-share listed enterprises," International Review of Financial Analysis, Elsevier, vol. 92(C).

    More about this item

    Keywords

    ;
    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:finlet:v:69:y:2024:i:pa:s1544612324010912. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/frl .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.