Can carbon emissions trading system promote the financial performance of industrial enterprises?

The carbon emission trading system (CETS), as a market-based mechanism for energy conservation and emission reduction, effectively drives green innovation among enterprises and exerts a significant impact on their financial performance. Using panel data from listed industrial enterprises during the period 2009–2022, this study employs a multi-period difference-in-differences approach, propensity score matching, and a mediation effect model to investigate the impact of carbon emission trading on corporate financial performance. The findings reveal that carbon emission trading significantly improves the financial performance of industrial enterprises. Mechanism analysis demonstrates that the carbon emission trading system enhances corporate financial performance by improving ESG performance and promoting green technological innovation, meanwhile green financing constraints play a negative moderating role in the relationship between carbon emission trading and financial performance. Heterogeneity analysis indicates that while the policy substantially enhances the financial performance of state-owned enterprises, its effect on nonstate-owned enterprises is statistically insignificant. Moreover, both small and medium-sized enterprises (SMEs) and large enterprises benefit from carbon emission trading, with the positive effect being more pronounced for SMEs. Corresponding countermeasures are proposed to advance carbon emission reduction in industrial enterprises from the dimensions of market development, ESG disclosure, innovation incentives, and financing support.