Can Carbon Trading Pilot Policy Affect the Value of China’s Manufacturing Firms? --Empirical Evidence from China's Manufacturing Sector from 2008 to 2019

We study the impact of carbon trading pilot policy on the value of manufacturing firms in China. Based on the data of manufacturing listed companies in Shanghai and Shenzhen A-shares from 2008 to 2019, a double-difference empirical study was conducted to investigate the impact of the carbon trading pilot policy on the value of enterprises. It is found that the carbon trading pilot policy is significantly positively related to enterprise value, and this conclusion still holds significantly after a series of robustness tests such as the balanced trend test, the placebo test, and the PSM test. The analysis of the mechanism of action shows that green innovation has a mediating role in the process of enhancing enterprise value by the carbon trading pilot policy, and the green innovation activities of enterprises can strengthen the positive impact of this policy on enterprise value creation. Heterogeneity analysis reveals that when enterprises meet the conditions of non-state ownership, low pollution and low environmental regulation, the carbon trading pilot policy has a more significant effect on the value enhancement of manufacturing enterprises.