The Impact Of Carbon Emission Trading System On Outward Foreign Direct Investment Of Chinese Listed Companies

In 2011,China began carbon emissions trading pilot projects in seven provinces and cities,and began trading online in 2013.In 2021,China’s national carbon emissions trading market is launched.At the same time,China’s outward foreign direct investment has achieved a long and stable development.There is a lot of literature on the relationship between environmental regulation and corporate OFDI,but the research needs to be improved and deepened under China’s carbon emissions trading system,especially at the micro-firm level.Therefore,the investigation of the direction and mechanism of the influence of carbon emission trading system on enterprises’ foreign direct investment is of practical significance for the improvement of China’s government policies and enterprises’ business decisions.Based on this,this paper constructs quasi-natural experiments with different policy pilot times as nodes,selects 4889 Chinese A-share enterprises as samples,and adopts Multi-period DID two-way fixed effects model and mediating-effects model to identify the direction of influence and transmission mechanism of carbon emissions trading system on foreign direct investment of Chinese enterprises,and draws the following conclusions:(1)Mechanistic analysis shows that,on the one hand,a mediating effects model based on firms’ R&D innovation suggests that a carbon trading system produces a competitiveness-enhancing effect on firms,which increases their OFDI.On the other hand,a mediating effect model based on firms’ capital appropriation suggests that carbon trading system generates a resource appropriation effect on firms,which reduces their outward direct investment.However,in general,the carbon trading system inhibits foreign direct investment by companies.(2)Under the heterogeneity analysis,the impact of carbon emissions trading system on outward FDI of enterprises in polluting industries is more significant,while the impact on enterprises in clean industries is not significant;the impact of outward FDI of enterprises in eastern regions is significantly affected by carbon emissions trading system,while the policy impact on enterprises in central and western regions is not significant;the impact of carbon emissions trading system on outward FDI of state-owned enterprises is more significant,while the impact on non-state-owned enterprises is not significant.The above empirical results still hold after parallel trend test,placebo test and robustness test.Based on the above findings,this paper further proposes related policy proposals to the government and enterprises: The government should continuously improve the construction of the carbon emissions trading system and promote low carbon transformation of enterprises.The enterprises should actively explore research and development of innovative technologies,while considering the cost of environmental regulation in their business activities.