The positive impact of electricity spot trading on ESG performance in energy-intensive enterprises

Electricity market reforms are vital for global energy transition. Using a firm-level panel dataset of listed companies from 2012 to 2020 and taking China’s electricity spot market pilot project as a quasi-natural experiment with a difference-in-differences-in-differences method, we examine its impact on ESG performance in energy-intensive enterprises. Drawing on a modified Coasean perspective that acknowledges transaction costs and government intervention, we propose both positive and negative pathways. Results show that electricity spot trading (EST) significantly enhances ESG performance through optimized resource allocation, improved employee governance, and enhanced operational stability, while we find no evidence that EST induces managerial short-termism. The positive effect is stronger in regions with higher marketization, particularly those with developed non-state economies, and among enterprises facing greater supplier competition. Both city-level and firm-level evidence further reveal that EST reduces carbon emission intensity, mitigating greenwashing concerns. This study provides Chinese evidence on the micro-level effects of EST and offers policy insights for advancing energy transitions through market mechanisms.