Corporate Financial Performance in the China Emission Trading Scheme: Evidence From China Listed Firm

Different ETS allowance distribution method may vary the effeteness of the ETS on the regulated firm’s performance. This paper uses the Propensity Score Matching Difference-in-Differences method found that the China ETS could increase its regulated firm competitiveness from different aspects. Furthermore, we have tested the impact of the carbon price and its volatility on firm financial performance. Different from the traditional view on the impact of the carbon price, this paper has found that growing the carbon price would benefit regulated firm financial performance, but higher volatility is harmful to the performance.