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Does financial uncertainty reduce carbon emission reduction performance? Evidence from China’s manufacturing industry

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  • Han, Pengcheng
  • Wang, Shumin

Abstract

Based on panel data of A-share listed manufacturing firms in China from 2011 to 2021, this study investigates the impact of financial uncertainty on corporate carbon emission reduction performance and its underlying mechanisms. Results show financial uncertainty significantly lowers carbon emission reduction performance, with stronger effects in non-high-tech firms and Low-Carbon City Pilot regions. Key transmission channels include bank credit, financing constraints, and green technological innovation. The negative impact of financial uncertainty is amplified by economic policy uncertainty but can be mitigated by government environmental subsidies.

Suggested Citation

  • Han, Pengcheng & Wang, Shumin, 2025. "Does financial uncertainty reduce carbon emission reduction performance? Evidence from China’s manufacturing industry," Finance Research Letters, Elsevier, vol. 85(PE).
    • Handle: RePEc:eee:finlet:v:85:y:2025:i:pe:s1544612325015168
    DOI: 10.1016/j.frl.2025.108262
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    References listed on IDEAS

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