Low-carbon city initiatives and firm risk: a quasi-natural experiment in China
Low-carbon city initiatives and firm risk: a quasi-natural experiment in China
This study contributes to the low-carbon city (LCC) related literature by providing causal evidence on the impact of carbon reduction regulation on firm risk. Using staggered adoption of LCC program shocks in China as a quasi-natural experiment, we implement a difference-in-differences (DiD) analysis to investigate the impact of the low-carbon city initiatives on firm risk. We find that low-carbon city initiatives are significantly correlated with firm total risk, systematic risk, and idiosyncratic risk. The results are more pronounced for firms with greater changes of investment in fixed assets and R&D and for firms in provinces with stronger legal enforcement. Our study provides in-depth insights into the low-carbon city initiatives and the firm-level impact of its implementation.
Huang, Jingchang
5bba76f8-a33a-4151-970e-e96c83e271ed
Cao, June
af0d62ff-d54c-412f-a152-cc04c63c7290
Hasan, Tahseen
ef2dbb59-885a-4ce3-bd41-32476c07a78a
Zhao, Jing
64d102a9-9ad6-4efa-bb81-a0b84696a829
22 October 2021
Huang, Jingchang
5bba76f8-a33a-4151-970e-e96c83e271ed
Cao, June
af0d62ff-d54c-412f-a152-cc04c63c7290
Hasan, Tahseen
ef2dbb59-885a-4ce3-bd41-32476c07a78a
Zhao, Jing
64d102a9-9ad6-4efa-bb81-a0b84696a829
Huang, Jingchang, Cao, June, Hasan, Tahseen and Zhao, Jing
(2021)
Low-carbon city initiatives and firm risk: a quasi-natural experiment in China.
Journal of Financial Stability, 57, [100949].
(doi:10.1016/j.jfs.2021.100949).
Abstract
This study contributes to the low-carbon city (LCC) related literature by providing causal evidence on the impact of carbon reduction regulation on firm risk. Using staggered adoption of LCC program shocks in China as a quasi-natural experiment, we implement a difference-in-differences (DiD) analysis to investigate the impact of the low-carbon city initiatives on firm risk. We find that low-carbon city initiatives are significantly correlated with firm total risk, systematic risk, and idiosyncratic risk. The results are more pronounced for firms with greater changes of investment in fixed assets and R&D and for firms in provinces with stronger legal enforcement. Our study provides in-depth insights into the low-carbon city initiatives and the firm-level impact of its implementation.
Text
Low-carbon city initiatives and firm risk-a quasi-natural experiment in China
- Version of Record
Restricted to Repository staff only
Request a copy
More information
Accepted/In Press date: 28 September 2021
e-pub ahead of print date: 6 October 2021
Published date: 22 October 2021
Identifiers
Local EPrints ID: 500767
URI: http://eprints.soton.ac.uk/id/eprint/500767
ISSN: 1572-3089
PURE UUID: c06bbc0a-029f-4142-bcd0-48e4596b0b29
Catalogue record
Date deposited: 13 May 2025 16:34
Last modified: 23 Oct 2025 02:27
Export record
Altmetrics
Contributors
Author:
Jingchang Huang
Author:
June Cao
Author:
Tahseen Hasan
Author:
Jing Zhao
Download statistics
Downloads from ePrints over the past year. Other digital versions may also be available to download e.g. from the publisher's website.
View more statistics