*3.2. Variables*

This study uses a series of financial variables, such as financial leverage, return, and profitability, as control variables, owing to their potential impact on companies' market value. Simultaneously, characteristic variables of individual companies, such as age, size, and management shareholding ratio, are used to control their impact on companies' market value. Variables and data descriptions are shown in Table 2.



**Table 2.** Variables and data descriptions.

#### *3.3. Descriptive Statistics*

Figure 1 shows the market value of listed companies for the pilot and non-pilot ETS regions. As shown in Figure 1, the market value of listed companies between pilot and non-pilot regions has been presented since 2011, while the trend is parallel before 2011. Although the pilot of the CET policy was only completed in 2013–2014, the Chinese NDRC proposed this policy officially at the end of 2011. Companies in the pilot regions would have behaved rationally and adopted forward-looking decision-making processes to reduce their emissions costs or taking innovative activities such as investing in abatement technologies [61]. Accordingly, the companies' market value difference between the pilot and non-pilot regions shows no significant change after 2013. Nevertheless, these results demonstrate that the parallel trend hypothesis of the DID model can be roughly confirmed graphically.

**Figure 1.** The market value of listed companies for pilot and non-pilot regions of ETS.

Table 3 presents the descriptive statistics of the dependent variable (MV) and control variables for the treatment and control groups. The results indicate that the average market value of companies in the treatment group is significantly higher than that in the control group. However, the differences in control variables, such as SIZE, BM, ROE, DAR, fix, ROA, MSR, lnage, cash, and subsidy, between the treatment and control group are not significant.


**Table 3.** Summary descriptive statistics of the main variables.
