Does Market Power Improve Corporate Carbon Efficiency? Based on Evidence from Listed Chinese Companies

As a key component of China’s sustainable development strategy, the “dual-carbon” goal indicates the need to actively and steadily promote carbon peaking and carbon neutrality and strengthen resource conservation and environmental protection—a core research focus published in Sustainability. Existing research in environmental economics and corporate sustainability suggests that improving carbon efficiency is a key pathway to climate-resilient industrialization, but the role of corporate market forces in this context remains under-explored. Consistent with the interdisciplinary scope of sustainability in the environmental, economic and social dimensions. This paper takes the industrial sector from 2012 to 2021 as the research sample and empirically researches and analyzes the relationship between enterprise market power and carbon efficiency and its mechanism through theoretical derivation and a fixed effect model. We found that enterprise market power is a remarkable contributor to carbon efficiency. The mechanism test found that the promotion role is reflected in the improvement of profitability, and profitability plays a mediating role in market power and carbon efficiency. In the further heterogeneity analysis, this study found that the degree of environmental information disclosure and whether an enterprise is heavily polluting present notable differences in carbon efficiency. The positive correlation between firms’ market power and carbon efficiency is more significant when firms have a lower degree of environmental information disclosure and are non heavily polluting firms. Through the expansive analysis, it is found that there is a marked cohort effect on carbon efficiency, and the market power can effectively empower the industry cohort effect of carbon efficiency.