The Impact of Chinese Carbon Emissions Trading System on Efficiency of Enterprise Capital Allocation: Effect Identification and Mechanism Test

Abstract

The carbon emission trading system, as a significant policy instrument to ensure the Chinese economy achieves a green and low carbon transition, will also affect economic enterprise efficiency. This paper takes listed enterprises in a Chinese carbon trading pilot from 2011 to 2020 as research samples, constructs a multi-period differential model, and explores the impact of Chinese the carbon emission trading system on enterprise capital allocation efficiency. We find that the Chinese carbon emission trading system effectively improves the capital allocation efficiency of enterprises, which is more significant in enterprises with light pollution intensity and strong regional environmental regulation. Further analysis shows that the carbon emission trading system can improve the efficiency of enterprise capital allocation by improving the efficiency of working capital management and asset operation efficiency, while the path of human capital value is not established. Carbon trading market activity and government efficiency play a positive moderating role in the impact of the carbon emission trading system on enterprise capital allocation efficiency. The higher carbon trading market activity and government efficiency, the stronger the relationship between them. The above conclusions provide empirical evidence for the microeconomic effects of the Chinese carbon emission trading system, and also provide a useful reference for the government to implement carbon trading according to local conditions and improve the efficiency of enterprise capital allocation.