How Does Emissions Trading Affect the Efficiency of Enterprise Resource Allocation? Evidence From China

Emission trading policies can provide environmental incentives for businesses, leading to a reduction in pollution emissions and promoting sustainable environmental development. Previous research indicated the significant impact of market-based environmental regulations on emission reduction by busi...

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Bibliographic Details
Published inSAGE open Vol. 13; no. 4
Main Authors Zhou, Bing, Zhang, Gong, Bi, Shulei
Format Journal Article
LanguageEnglish
Published Los Angeles, CA SAGE Publications 01.10.2023
SAGE PUBLICATIONS, INC
SAGE Publishing
Subjects
Efficiency
Emissions control
Emissions trading
Environmental incentives
Environmental regulations
Pollution control
Resource allocation
Resource efficiency
Sulfur dioxide
Sustainable development
enterprise resource allocation
management
social sciences
emissions trading
business law and business ethics
economic development
corporate governance
environmental regulation reform
economic science
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Summary:Emission trading policies can provide environmental incentives for businesses, leading to a reduction in pollution emissions and promoting sustainable environmental development. Previous research indicated the significant impact of market-based environmental regulations on emission reduction by businesses, however, there is a lack of in-depth examination from the perspective of overall corporate management efficiency. In this study, we conducted research using the 2007 SO2 emission trading pilot program as a quasi-natural experiment to investigate the mechanisms and effects of emission trading systems on corporate resource allocation efficiency. The study found that the implementation of emission trading systems significantly improves corporate resource allocation efficiency. Furthermore, through market regulation and administrative supervision mechanisms, corporate resource allocation efficiency can be further enhanced. However, emission trading systems have heterogeneous effects on resource allocation efficiency, with a stronger promotion effect on optimizing resource allocation in cases of greater financing constraints and higher levels of corporate governance. This study provides important policy insights for further promoting market-based environmental regulation reforms and improving corporate resource allocation efficiency.
ISSN:2158-2440
2158-2440
DOI:10.1177/21582440231212040