Impact of Low-carbon City Construction on Financing, Investment, and Total Factor Productivity of Energy-intensive Enterprises

Faced with the global climate change, as a major greenhouse gas emitter, China launched a pilot policy on low-carbon city construction since 2010. Few studies have discussed how climate policies affect the investment and financing behavior of energy-intensive enterprises. Based on the micro data of...

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Bibliographic Details
Published in:The Energy journal (Cambridge, Mass.) Mass.), 2023-03, Vol.44 (2), p.79-102
Main Authors: Huwei, Wen, Shuai, Chen, Chien-Chiang, Lee
Format: Article
Language:English
Subjects:
Air quality management
Banking
Carbon
Carbon content
Chemical industry
Cities
Climate change
Climate policy
Control
Electric utilities
Emissions (Pollution)
Emitters
Energy
Energy development
Environmental aspects
Environmental policy
Finance
Financing
Global climate
Global warming
Greenhouse gases
Herbicides
Human capital
Influence
Investments
Laws, regulations and rules
Metal industry
Pesticides industry
Petroleum industry
Policies
Productivity
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Summary:Faced with the global climate change, as a major greenhouse gas emitter, China launched a pilot policy on low-carbon city construction since 2010. Few studies have discussed how climate policies affect the investment and financing behavior of energy-intensive enterprises. Based on the micro data of A-share listed enterprises in China’s energy-intensive industries, this study aims to assess the productivity effect of low-carbon city pilot (LCCP) policy and investigates the mechanism of financing and investment using the difference-in-difference method. Empirical results provide evidence that the LCCP policy has significantly improved the total factor productivity of energy-intensive enterprises. In terms of the mechanisms, the LCCP policy has increased the supply of bank credit to enterprises and encouraged their long-term investment in fixed assets and R&D activities. The productivity effect of the LCCP policy is greater for state-owned enterprises and enterprises with political connection. Urban human capital, industrial agglomeration, and resource endowment contribute to the productivity effect of LCCP policy for enterprises in the energy-intensive industries. The findings show that the LCCP is an effective comprehensive policy to promote the high-quality development of energy-intensive industries, and the findings also provide enlightenment for enacting better climate transition policies.
ISSN:0195-6574
1944-9089
DOI:10.5547/01956574.44.2.hwen