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Changes in the labor share of enterprises under the green and low-carbon transition: Empirical evidence from China’s carbon emission trading pilot

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  • Xin Luo
  • Jianti Li
  • Dawei Feng

Abstract

Green and low carbon reflect the high-quality development, while income distribution is an indicator of the balance of development. Is there a lack of fairness in the process of green and low carbon transition of enterprises? Using data from A-share listed companies from 2009 to 2016, this paper constructs a DID identification framework for controlling the endogeneity problem using the 2013 carbon trading policy pilot as a quasi-natural experiment to empirically test the impact of corporate low-carbon transformation on corporate labor income share in the context of carbon trading policy. The findings indicate that carbon trading policy decreases the labor income share of firms. In addition, we demonstrate that the low-carbon transition promotes labor productivity, suggesting that the Porter’s hypothesis is confirmed in China, but the increase in labor wages is not in tandem with productivity growth, resulting in reduced labor income share. Heterogeneity analysis shows that the impact of carbon trading policy on labor income share is mainly pronounced in larger firms, high technology firms and persistent incumbent firms. Collectively, these results are expected to accurately improve our understanding on the impact of low-carbon transformation of enterprises on income distribution and provide reference for the government to formulate industrial policies and distribution mechanisms under low-carbon economy.

Suggested Citation

  • Xin Luo & Jianti Li & Dawei Feng, 2024. "Changes in the labor share of enterprises under the green and low-carbon transition: Empirical evidence from China’s carbon emission trading pilot," PLOS ONE, Public Library of Science, vol. 19(4), pages 1-15, April.
    • Handle: RePEc:plo:pone00:0300595
    DOI: 10.1371/journal.pone.0300595
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    References listed on IDEAS

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