Capital Reallocation Under Carbon Pricing Mechanisms: Micro-Level Evidence from China's Carbon Trading Pilots on Green Investment in the Manufacturing Sector

Shunran Zheng

doi:10.47297/wspdecWSP2515-797316.20261003

PDF
Export
Share
Collection
Album

Capital Reallocation Under Carbon Pricing Mechanisms: Micro-Level Evidence from China's Carbon Trading Pilots on Green Investment in the Manufacturing Sector

Volume 10, Issue 3

Views: 0 Downloads: 1

Capital Reallocation Under Carbon Pricing Mechanisms: Micro-Level Evidence from China's Carbon Trading Pilots on Green Investment in the Manufacturing Sector
Capital Reallocation Under Carbon Pricing Mechanisms: Micro-Level Evidence from China's Carbon Trading Pilots on Green Investment in the Manufacturing Sector
School of Economics and Management, Major in Accounting, Dalian Jiaotong University, Dalian, Liaoning, 116028, China
Vol. 10, Issue 3, Pages: 89-92(2026)
Published：30 March 2026
DOI：10.47297/wspdecWSP2515-797316.20261003
Accepted：

Scan QR Code

Zheng Shunran.Capital Reallocation Under Carbon Pricing Mechanisms: Micro-Level Evidence from China's Carbon Trading Pilots on Green Investment in the Manufacturing Sector[J].Development Economics of China,2026,10(03):89-92.
DOI：

Zheng Shunran.Capital Reallocation Under Carbon Pricing Mechanisms: Micro-Level Evidence from China's Carbon Trading Pilots on Green Investment in the Manufacturing Sector[J].Development Economics of China,2026,10(03):89-92. DOI： 10.47297/wspdecWSP2515-797316.20261003.

摘要

Abstract

Driven by China's "Dual Carbon" objectives

market-based carbon pricing

notably the Emissions Trading Scheme (ETS)

has become a fundamental tool for industrial decarbonization. This research examines how carbon pricing mechanisms influence the investment behaviors of manufacturing enterprises

highlighting the shift from passive regulatory compliance to proactive sustainable development. Employing a staggered Difference-in-Differences (DID) model on panel data from Chinese A-share listed manufacturing firms (2008–2022)

this study empirically assesses the policy's impact on investment magnitude and composition.Findings demonstrate that carbon pricing substantially stimulates green investment

successfully redirecting capital into low-carbon domains. Mechanism analyses indicate this shift is motivated by an "innovation compensation" effect

aligning with the Porter Hypothesis

alongside enhanced resource allocation efficiency. Heterogeneity evaluations reveal that private entities and firms in regions with robust institutional frameworks demonstrate heightened sensitivity to carbon price signals. These results offer robust micro-level evidence supporting the efficacy of carbon markets and supply actionable policy insights for optimizing quota allocations and bolstering green financial frameworks to encourage sustainable industrial expansion.

关键词

Keywords

references

From Theory to Practice : Making Carbon Pricing Work - Policy Center , https://www.policycenter.ma/sites/default/files/2024-05/PP_07-24_Rim%20Berahab.pdf https://www.policycenter.ma/sites/default/files/2024-05/PP_07-24_Rim%20Berahab.pdf .

Carbon Trading Scheme in the People's Republic of China : Evaluating the Performance of Seven Pilot Projects , https://direct.mit.edu/adev/article/35/2/131/9958/Carbon-Trading-Scheme-in-the-People-s-Republic-of https://direct.mit.edu/adev/article/35/2/131/9958/Carbon-Trading-Scheme-in-the-People-s-Republic-of .

How Does the Carbon Emission Trading Policy Enhance Corporate Green Technology Innovation? Evidence from Advanced Manufacturing Enterprises - MDPI , , https://www.mdpi.com/2071-1050/17/18/8199 https://www.mdpi.com/2071-1050/17/18/8199 .

Innovation-Led Transitions in Energy Supply - National Bureau of Economic Research , https://www.nber.org/system/files/working_papers/w23420/w23420.pdf https://www.nber.org/system/files/working_papers/w23420/w23420.pdf .

The Influence of the EU Emissions Trading System on the ESG Performance of European Firms : The case of Oil and Gas Industry , https://studenttheses.uu.nl/bitstream/handle/20.500.12932/49594/The%20Influence%20of%20the%20EU%20Emissions%20Trading%20System%20on%20the%20ESG%20Performance%20of%20European%20Firms.pdf?sequence=1&isAllowed=y https://studenttheses.uu.nl/bitstream/handle/20.500.12932/49594/The%20Influence%20of%20the%20EU%20Emissions%20Trading%20System%20on%20the%20ESG%20Performance%20of%20European%20Firms.pdf?sequence=1&isAllowed=y .

The Impact of China's ETS on Corporate Green Governance Based on the Perspective of Corporate ESG Performance - PMC , https://pmc.ncbi.nlm.nih.gov/articles/PMC9915039/ https://pmc.ncbi.nlm.nih.gov/articles/PMC9915039/ .

The Halo Effect of Government: Does State-Owned Capital Promote the Green Innovation of Chinese Private Enterprises? - MDPI , https://www.mdpi.com/2071-1050/15/11/8587 https://www.mdpi.com/2071-1050/15/11/8587 .

Research on the Impact of Data Factors on Enterprise Green Innovation—Evidence from Chinese Manufacturing Enterprises - MDPI , https://www.mdpi.com/2071-1050/17/5/2184 https://www.mdpi.com/2071-1050/17/5/2184 .

The Real Effects of China's Carbon Dioxide Emissions Trading Program - The American Finance Association , https://afajof.org/management/viewp.php?n=129864 https://afajof.org/management/viewp.php?n=129864 .

Soft budget constraint theories https://english.ckgsb.edu.cn/sites/default/files/files/24_%20MX_SBC_ET2001.pdf https://english.ckgsb.edu.cn/sites/default/files/files/24_%20MX_SBC_ET2001.pdf .

The synergistic effect of carbon trading and green credit on manufacturing enterprises' production decisions and sustainability performance - IDEAS/RePEc , https://ideas.repec.org/a/eee/reveco/v103y2025ics1059056025006823.html. https://ideas.repec.org/a/eee/reveco/v103y2025ics1059056025006823.html. .