How Does Carbon Emission Trading Affect Enterprise Market Value?—Evidence from China

In order to explore how does carbon emission trading (CET) policy affects enterprise market value (EMV), this study considers the China’s pilot CET as a natural experiment, takes A-share listed high-carbon enterprises from 2011 to 2019 as a sample, panel regression techniques such as difference-in-differences (DID) and difference-in-difference-in-difference (DDD) models are used to analyse the impact of carbon market mechanism design on EMV. The empirical results are as follows: (1) The CET can significantly enhance the EMV of CET-covered enterprises, indicating that China's CET supports the Porter hypothesis. Compared with state-owned enterprises and small enterprises, the CET has a more significant effect on promoting the EMV of non-state-owned enterprises and large enterprises. (2) The mixed of free and auction carbon quota allocation scheme can make up the lack of market incentives in the free quota allocation system thus significantly increase EMV. The economic and non-economic mixed penalty mechanisms can effectively encourage enterprises to participate in carbon trading activities. (3) The results of the mediation effect test indicate that the mixed schemes can improve EMV by taking low-carbon technology innovation than sole market scheme. These findings have important reference value for improving EMV under the CTES, achieving the carbon peak and carbon neutrality goals, and promoting sustainable economic development