Does the carbon emissions trading scheme improve the corporate environmental information disclosure level? Evidence from China

Recently, a great deal of literature has discussed the effects of the carbon emissions trading scheme (CETS) and the factors that affect the corporate environmental information disclosure (CEID) level. However, no researchers have studied how CETS affects the CEID level. Based on a difference-in-difference-in-differences model, we discover that CETS can improve the CEID level. The findings are robust and persistent even after testing for time lags and leads effects, changing the measure of the dependent variable, testing for enterprise relocation, adjusting the fixed effect method, testing for concurrent policies, and performing placebo tests. The reason is that CETS can encourage corporate green technology innovation and environmental protection investment, thus improving the CEID level. Further investigation reveals that the impact of CETS on promoting the CEID level is more significant when the following conditions are met: the enterprises are in provinces and cities in the east and northeast; they are state-owned; and they have strong political connections. This paper expands on the current field of research on the influence effects of CETS, broadens the understanding of the factors influencing the CEID level, and investigates the mechanism by which CETS improves the CEID level.