The Impact of Emissions Trading Systems on Corporate Productivity and Competitiveness Through Green Technology Innovation: A Systematic Literature Review

ABSTRACT Emissions trading systems (ETS) represent key market‐based instruments for mitigating greenhouse gas emissions and influencing corporate performance. Empirical evidence on the impact of ETS on corporate productivity, profitability, and competitiveness (CPPC) and the role of green technology innovation (GTI) remains mixed. Following the PRISMA guidelines, this systematic literature review synthesizes evidence from 75 peer‐reviewed research articles published between 2016 and 2025. The literature is organized into four pathways: direct response effects, innovation activation effects, innovation outcome effects, and strategic avoidance behaviors. The review shows that the direct response effect of ETS exhibits heterogeneity and is mixed in the short run, whereas more consistent performance improvements emerge when GTI is activated and realized. The findings suggest that ETS impacts are better understood as a multistage, adaptive process rather than a static, causal relationship. This study offers an integrative framework linking ETS, GTI, and CPPC, with implications for both policy design and corporate sustainability strategy.