The Impact of Chinese Carbon Emissions Trading System on Efficiency of Enterprise Capital Allocation: Effect Identification and Mechanism Test
Abstract
:1. Introduction
2. Literature Review
3. Research Hypothesis
3.1. Impact of Carbon Emission Trading System on Capital Allocation Efficiency of Enterprises
3.2. Analysis of Intermediary Mechanism
- (1)
- The human capital value path. The carbon emission trading system forces firms to realize clean technology innovation to reduce carbon emissions. The complexity of technology innovation makes it difficult for low-quality human capital to match it. Therefore, it will increase the demand of enterprises for high-quality human capital, induce human capital premium and improve human capital value [33]. This will encourage enterprises to expand human capital investment, enhance the ability of employees to collect, mine and absorb knowledge, so as to strengthen the internal knowledge spillover effect and improve the level of enterprise innovation [40], which will help enterprises improve product quality, expand market share and cultivate competitive advantages, and ensure that enterprises further improve capital allocation efficiency.
- (2)
- The working capital management efficiency path. When included in the carbon emission rights trading list, it means that enterprises do not sufficiently utilize their energy, which shows their characteristics of large pollution emissions, high resource consumption and low operating efficiency [41]. In order to reduce environmental costs, enterprises seeking to maximize profits will take the initiative to improve the links with insufficient operational efficiency, scientifically formulate production plans, monitor production processes and optimize cost control in the daily production and operation process [42], and ultimately improve the efficiency of working capital management. Meanwhile, inclusion in the carbon emission rights trading list will encourage the external media to pay attention to the enterprise, so as to reduce the degree of information asymmetry inside and outside the enterprise, so as to improve the efficiency of enterprise project investment [35]. This will further optimize the working capital allocation of enterprises and improve capital allocation efficiency.
- (3)
- The asset operation benefit path. Under the pressure of carbon emission trading, enterprises will strengthen the technological transformation of existing assets to eliminate production units with high energy consumption, high pollution and massive discharge, and meet the environmental protection objectives of the environmental supervision department. Technological transformation makes the enterprise bear a certain production cost, which will reduce the level of equipment stock in the production line. However, the production efficiency of old equipment is low and it is sensitive to cost changes, so the stock of old equipment will decrease more [43]. This will increase the stock ratio of new equipment in the enterprise, improve the asset operation efficiency on the whole, and then make the enterprise assets reach the optimal output state, so as to improve the efficiency of enterprise capital allocation.
3.3. Analysis of Moderation Mechanism
- (1)
- Moderating effect of carbon market trading activity. The trading activity of the carbon market promotes market mechanism to play a positive role. Trading activity is the premise of the price discovery function and market effectiveness of the trading market, and provides an important basis for ensuring the pricing efficiency of the trading market [44]. Whether the trading entity actively participates in carbon trading depends largely on whether the market pricing is reasonable. The higher the trading activity, the more the carbon trading price can contain the real information of the current carbon emission rights trading, which reduces the transaction cost and return uncertainty of the emission control entity [8], so that the emission control enterprises have more power to take part in carbon trading. First, this strengthens the supervision effect of carbon trading on the production and operation of emission control enterprises, and promotes them to produce with equipment with lower energy consumption, less pollution and higher output efficiency, thus ameliorating the efficiency of enterprise asset and capital allocation; secondly, in the active carbon market, emission control enterprises can obtain relatively high income from carbon trading, which improves the output efficiency of financial assets of enterprises and strengthens the promotion of the efficiency of financial capital allocation; finally, the active participation of emission control subjects will enhance the improvement of carbon trading on regional environmental quality, which further enhances the attraction of the province to high-quality labor, and enables enterprises to improve their human capital allocation efficiency at a lower cost.
- (2)
- Moderating effect of government efficiency. Government with high efficiency provides the foundation for the standardized and orderly operation of the carbon market. During the actual operation of carbon trading, the government plays a role by strengthening carbon quota management, accelerating the speed of administrative examination and approval, and strengthening market supervision, so as to stabilize the carbon price and guarantee the quota performance of emission control enterprises, and make the carbon market operate smoothly to play the role of promoting emission reduction of emission control entities. The above effect relies on the efficiency of the government. The higher the efficiency of government, the more capable the government will be to stabilize the price of carbon emission rights within a reasonable range [45], thus greatly reducing the transaction cost of emission control enterprises, making them more willing to participate in market transactions, ultimately enhancing the role of carbon trading in forcing enterprises to improve technology, and further improving the efficiency of enterprise capital allocation. Meanwhile, the administration can improve relevant laws and regulations to strengthen the supervision and control of emission control enterprises, and formulate relevant laws and regulations to form a collaborative mechanism with carbon trading to enhance the implementation effect of carbon emission trading. In this regard, a government with higher administrative efficiency will formulate more targeted carbon emission rights trading regulations to enable enterprises to enhance the disclosure of carbon emission-related information [16], which is conducive to alleviating the information asymmetry between the market and enterprises, improving the efficiency of enterprise capital use and significantly improving capital allocation efficiency.
4. Research Design
4.1. Sample Selection and Data Source
4.2. Model Setting and Variable Descriptions
5. Empirical Results
5.1. Descriptive Statistics and Multicollinearity Test
5.2. Influence of Carbon Emission Trading System on Capital Allocation Efficiency of Enterprises
5.3. Robustness Test
5.3.1. Parallel Trend Test
5.3.2. Placebo Test
5.3.3. PSM-DID Test
5.3.4. Replace the Measurement Method of Efficiency of Enterprise Capital Allocation
5.4. Mechanism Analysis
5.4.1. Analysis of Intermediary Mechanism
5.4.2. Analysis of Moderating Mechanism
5.5. Heterogeneity Test
6. Research Conclusions and Policy Recommendations
Author Contributions
Funding
Institutional Review Board Statement
Informed Consent Statement
Data Availability Statement
Conflicts of Interest
References
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Variable Name | Variable Symbol | Definition |
---|---|---|
Efficiency of capital allocation | ECAi,t | Construction of stochastic frontier analysis model |
Virtual variable of carbon emission trading system | Interacti,t | If the enterprise enters the list of carbon emission trading system in that year, it is 1; otherwise, it is 0 |
Company size | Sizei,t | Natural logarithm of total assets |
The beginning performance | Roai,t | The ratio of corporates’ annual EBIT to the total assets at the end of the year |
Cash ratio | CashRatioi,t | Ratio of cash and cash equivalents held by enterprises to current liabilities |
Tobin’s Q | TobinQi,t | Ratio of market value to total assets |
Book to market ratio | BMi,t | Ratio of book value to market value |
Earnings per share | EPSi,t | Ratio of the enterprise’s current year’s EBIT to the number of share capital |
Sales growth rate | SalesGrowthi,t | Ratio of the difference between the total operating income of the enterprise in the current year and the total operating income of the previous year to the total operating income of the previous year |
Variables | Observations | Mean Value | Median | Variance | Minimum | Maximum |
---|---|---|---|---|---|---|
ECAi,t | 5601 | 0.828 | 0.836 | 0.062 | 0.594 | 0.953 |
Interacti,t | 5601 | 0.008 | 0.000 | 0.091 | 0.000 | 1.000 |
Sizei,t | 5601 | 22.390 | 22.150 | 1.466 | 19.850 | 27.070 |
Roai,t | 5601 | 0.067 | 0.057 | 0.054 | −0.077 | 0.272 |
CashRatioi,t | 5601 | 1.118 | 0.433 | 1.993 | 0.035 | 12.670 |
TobinQi,t | 5601 | 2.079 | 1.641 | 1.302 | 0.872 | 8.087 |
BMi,t | 5601 | 0.551 | 0.519 | 0.262 | 0.099 | 1.174 |
EPSi,t | 5601 | 0.440 | 0.307 | 0.512 | −0.590 | 2.896 |
SalesGrowthi,t | 5601 | 0.195 | 0.118 | 0.412 | −0.419 | 2.796 |
Variables | (1) | (2) | (3) | (4) |
---|---|---|---|---|
ECAi,t | ECAi,t | ECAi,t | ECAi,t | |
Interacti,t | 0.0097 * | 0.0121 ** | 0.0082 * | 0.0098 * |
(1.88) | (2.19) | (1.68) | (1.71) | |
Sizei,t | −0.0023 | −0.0034 * | −0.0025 | −0.0081 *** |
(−1.56) | (−1.75) | (−1.49) | (−2.93) | |
Roai,t | 0.3831 *** | 0.3744 *** | 0.3784 *** | 0.3721 *** |
(12.30) | (11.37) | (11.91) | (11.07) | |
CashRatioi,t | 0.0042 *** | 0.0042 *** | 0.0044 *** | 0.0045 *** |
(5.65) | (5.40) | (5.92) | (5.82) | |
TobinQi,t | −0.0025 ** | −0.0026 ** | −0.0027 ** | −0.0032 *** |
(−2.32) | (−2.33) | (−2.46) | (−2.86) | |
BMi,t | −0.0023 | −0.0047 | −0.0247 *** | −0.0314 *** |
(−0.38) | (−0.76) | (−3.20) | (−3.80) | |
EPSi,t | 0.0080 ** | 0.0095 ** | 0.0067 * | 0.0079 ** |
(2.18) | (2.39) | (1.83) | (1.97) | |
SalesGrowthi,t | 0.0017 | 0.0015 | 0.0031 | 0.0037 * |
(0.82) | (0.74) | (1.59) | (1.91) | |
Constant | 0.8513 *** | 0.8788 *** | 0.8683 *** | 0.9947 *** |
(27.26) | (20.42) | (25.05) | (16.78) | |
Firm | NO | YES | NO | YES |
Year | NO | NO | YES | YES |
Observations | 5601 | 5601 | 5601 | 5601 |
R2 | 0.231 | 0.231 | 0.266 | 0.267 |
Variables | Parallel Trend Test | Placebo Test | PSM + DID | Variables Replacement |
---|---|---|---|---|
(1) | (2) | (3) | (4) | |
0.0034 | ||||
(0.53) | ||||
0.0085 | ||||
(1.56) | ||||
0.0008 | ||||
(0.13) | ||||
Interacti,t | 0.0157 * | 0.0172 | 0.0182 *** | −0.0258 * |
(1.73) | (1.61) | (3.02) | (−1.91) | |
Controlsi,t | YES | YES | YES | YES |
Firm | YES | YES | YES | YES |
Year | YES | YES | YES | YES |
Constant | 0.9947 *** | 0.9950 *** | 1.1042 *** | −0.2054 *** |
(16.77) | (16.79) | (14.63) | (−2.93) | |
Observations | 5601 | 5601 | 3489 | 5164 |
R2 | 0.267 | 0.267 | 0.317 | 0.114 |
Variables | Sample | Difference Test of Means | Drop (%) | t Test | ||
---|---|---|---|---|---|---|
Treated | Untreated | t | p > t | |||
Sizei,t | Matched | 22.487 | 22.409 | −54.4 | 0.37 | 0.715 |
Unmatched | 22.487 | 22.366 | 0.53 | 0.597 | ||
Roai,t | Matched | 0.068 | 0.065 | −212.2 | 0.37 | 0.713 |
Unmatched | 0.068 | 0.059 | 0.82 | 0.413 | ||
CashRatioi,t | Matched | 0.624 | 1.067 | 93.5 | −1.6 | 0.11 |
Unmatched | 0.624 | 0.5957 | 0.21 | 0.83 | ||
TobinQi,t | Matched | 2.074 | 2.090 | 19.5 | −0.08 | 0.933 |
Unmatched | 2.074 | 2.061 | 0.07 | 0.948 | ||
BMi,t | Matched | 0.521 | 0.553 | 66.3 | −0.81 | 0.416 |
Unmatched | 0.521 | 0.532 | −0.23 | 0.822 | ||
EPSi,t | Matched | 0.280 | 0.438 | 90.8 | −2.09 | 0.037 |
Unmatched | 0.280 | 0.266 | 0.23 | 0.822 | ||
SalesGrowthi,t | Matched | 0.148 | 0.196 | 93.4 | −0.78 | 0.433 |
Unmatched | 0.148 | 0.152 | −0.06 | 0.955 |
Variables | Human Capital Value | Working Capital Management Efficiency | Operating Efficiency of Assets | |||
---|---|---|---|---|---|---|
VAICi,t | ECAi,t | WCMEi,t | ECAi,t | ACRi,t | ECAi,t | |
(1) | (2) | (3) | (4) | (5) | (6) | |
Interacti,t | −0.1375 (−0.85) | 0.0107 ** (2.14) | −19.9268 ** (−2.02) | 0.0091 * (1.76) | 0.0052 ** (2.45) | 0.0066 * (1.88) |
VAICi,t | 0.0070 *** (5.10) | |||||
WCMEi,t | −0.0000 *** (−2.66) | |||||
ACRi,t | 0.6176 *** (5.97) | |||||
Controlsi,t | YES | YES | YES | YES | YES | YES |
Constant | −2.6166 * (−1.73) | 1.0106 *** (18.15) | −94.8626 (−0.54) | 0.9846 *** (16.13) | 0.1579 *** (9.08) | 0.8972 *** (14.53) |
Firm | YES | YES | YES | YES | YES | YES |
Year | YES | YES | YES | YES | YES | YES |
Observations | 5591 | 5591 | 5557 | 5557 | 5601 | 5601 |
R2 | 0.296 | 0.290 | 0.278 | 0.102 | 0.929 | 0.292 |
Sobel Test | α2 is insignificant, |Z| = 0.7514 <0.97, there is no intermediary effect | γ2 and γ6 is significant, there is no need for Sobel Test | θ2 and θ6 is significant, there is no need for Sobel Test |
Variables | (1) | (2) |
---|---|---|
ECAi,t | ECAi,t | |
Interacti,t | −0.0093 | −0.0209 |
(−1.11) | (−1.10) | |
Activityi,t | 0.0008 | |
(1.11) | ||
Activityi,t × Interacti,t | 0.0023 *** | |
(2.85) | ||
GEi,t | 0.0022 | |
(0.10) | ||
GEi,t × Interacti,t | 0.0607 * | |
(1.78) | ||
Sizei,t | −0.0079 *** | −0.0081 *** |
(−2.79) | (−2.94) | |
Roai,t | 0.3682 *** | 0.3727 *** |
(10.62) | (11.05) | |
CashRatioi,t | 0.0045 *** | 0.0045 *** |
(5.69) | (5.81) | |
TobinQi,t | −0.0035 *** | −0.0032 *** |
(−2.93) | (−2.86) | |
BMi,t | −0.0321 *** | −0.0314 *** |
(−3.74) | (−3.80) | |
EPSi,t | 0.0084 ** | 0.0079 * |
(1.97) | (1.96) | |
SalesGrowthi,t | 0.0043 ** | 0.0037 * |
(2.10) | (1.91) | |
Constant | 0.9828 *** | 0.9935 *** |
(16.39) | (16.28) | |
Firm | YES | YES |
Year | YES | YES |
Observations | 5601 | 5601 |
R2 | 0.262 | 0.267 |
Variables | Higher Level of Pollution (1) | Lower Level of Pollution (2) | Higher Level of Environmental Regulation (3) | Lower Level of Environmental Regulation (4) |
---|---|---|---|---|
Interacti,t | 0.0081 | 0.0091 ** | 0.0140 *** | 0.0113 |
(1.29) | (2.47) | (4.28) | (1.59) | |
Sizei,t | −0.0116 * | −0.0063 ** | −0.0166 *** | −0.0055 |
(−1.93) | (−2.03) | (−4.21) | (−1.56) | |
Roai,t | 0.2872 *** | 0.4167 *** | 0.3629 *** | 0.3348 *** |
(5.31) | (10.16) | (6.58) | (7.68) | |
CashRatioi,t | 0.0057 *** | 0.0041 *** | 0.0044 *** | 0.0038 *** |
(3.54) | (4.80) | (3.20) | (3.95) | |
TobinQi,t | −0.0017 | −0.0036 *** | −0.0014 | −0.0011 |
(−0.88) | (−2.71) | (−1.23) | (−0.48) | |
BMi,t | 0.0005 | −0.0457 *** | −0.0137 | −0.0364 *** |
(0.03) | (−4.90) | (−1.36) | (−3.03) | |
EPSi,t | 0.0154 *** | 0.0040 | 0.0085 | 0.0102 ** |
(2.60) | (0.82) | (1.51) | (2.15) | |
SalesGrowthi,t | 0.0046 | 0.0033 | 0.0037 | 0.0047 |
(1.44) | (1.40) | (1.53) | (1.28) | |
Constant | 1.0498 *** | 0.9669 *** | 1.1506 *** | 0.9415 *** |
(7.69) | (14.75) | (13.13) | (12.46) | |
Firm | YES | YES | YES | YES |
Year | YES | YES | YES | YES |
Observations | 1689 | 3912 | 2472 | 3129 |
R2 | 0.284 | 0.272 | 0.254 | 0.245 |
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Wang, Z.; Guo, J.; Luo, G. The Impact of Chinese Carbon Emissions Trading System on Efficiency of Enterprise Capital Allocation: Effect Identification and Mechanism Test. Sustainability 2022, 14, 13151. https://doi.org/10.3390/su142013151
Wang Z, Guo J, Luo G. The Impact of Chinese Carbon Emissions Trading System on Efficiency of Enterprise Capital Allocation: Effect Identification and Mechanism Test. Sustainability. 2022; 14(20):13151. https://doi.org/10.3390/su142013151
Chicago/Turabian StyleWang, Zijin, Jitao Guo, and Gengyan Luo. 2022. "The Impact of Chinese Carbon Emissions Trading System on Efficiency of Enterprise Capital Allocation: Effect Identification and Mechanism Test" Sustainability 14, no. 20: 13151. https://doi.org/10.3390/su142013151