Do Carbon Emission Trading Schemes Promote the Green Transition of Enterprises? Evidence from China

As one of the environmental governance tools used to achieve green and low-carbon development in China, the ability of carbon emission trading schemes (CETS) to promote the green transition of enterprises is key to assessing the effectiveness of their implementation. Therefore, this paper used the panel data of China A-share listed heavy-polluting enterprises from 2010 to 2019, adopted the super-SBM model and GML index to measure the green total factor productivity (GTFP) of enterprises as an indicator of green transition, and further employed a staggered difference-in-difference model (DID) based on propensity score matching (PSM) to investigate the impact and mechanism of CETS on the green transition of enterprises. The results revealed that CETS significantly improved the green development efficiency of heavy-polluting enterprises and promoted green transition. In addition, the promotion was more pronounced among enterprises with weak cost transfer abilities, low levels of financing constraints, and high-quality internal control systems as well as in areas with high environmental enforcement intensity. More importantly, the mechanism analysis showed that heavy-polluting enterprises mainly chose to increase green technological innovation, especially substantive green technological innovation, and accelerated productive capital renewal to achieve their green transition targets. This study provides empirical evidence for improving the construction of the national carbon emission trading market and promoting the green transition and low-carbon development of heavy-polluting enterprises.