Carbon Market,Environmental Regulation And Outward Foreign Direct Investment

In the context of global warming,more and more countries have joined the ranks of "carbon reduction",which has required countries to actively share responsibilities,among which foreign direct investment by enterprises is an important way for carbon emissions to flow between countries.In 2017,the National Development and Reform Commission issued the "National Carbon Emissions Trading Market Construction Plan(Power Generation Industry)" which opened the prelude to the establishment of a national carbon emissions trading market,with key list submission,data verification,and simulated quota trading as the policy implementation content and focus.This paper believes that although the national carbon trading was not opened in 2017,the state,provinces and cities have begun to pay attention to and supervise key enterprises,and has already had an impact on the investment behavior of enterprises.In addition,the change of corporate investment layout is not instantaneous.It takes time to adjust,and the preparation period before the operation of the carbon market is just the key node of corporate investment changes.The study of carbon market advanced policies can better reflect policy expectations on corporate the impact of investment layout.Existing research results mostly focus on the impact of carbon market construction.There are few studies on such advanced policies,and insufficient research on the expected effects of carbon market policies.Generally speaking,"the implementation of carbon market advanced policies" and "enhancing environmental regulation" draw an equal sign,lack of detailed analysis and empirical research.In this context,research on the impact of carbon market advanced policies on enterprises’ outward foreign investment will help to enrich the research on the expected effect of the establishment of the carbon market,help to build a more comprehensive and perfect carbon market in China,and help to implement the "go global" strategy.The strategic policy is conducive to the long-term and healthy outward foreign investment and development of enterprises,and has strong theoretical and practical significance.This paper uses Chinese listed companies from 2013 to 2021 as a sample,using the difference-in-difference(DID)model at the company level to empirically study the expected effect of carbon market advanced policies,and analyzes whether the four types of environmental regulations are strengthened or not.Further,by replacing variables and the robustness of the above conclusions was tested by using the model,adjusting the scope of the control group,and the propensity score matching method(PSM).The parallel trend test was carried out to verify the validity of the research,combined with the firm cost theory and the "pollution haven hypothesis" to answer the question in depth how carbon market expectations affect outward foreign investment.the "Porter Hypothesis" is tested through heterogeneity analysis,and the difference of Porter effect among enterprises with different productivity is verified.The main conclusions of this paper include: 1.The carbon market advanced policy has promoted the outward foreign direct investment behavior of enterprises,including the outward foreign investment quota and outward foreign investment decision-making.And the effect of the policy is significantly positive under various robustness tests.2.The carbon market advanced policy enriches the means of market-incentivebased environmental regulation,replaces other means of this type,and strengthens the intensity of information-disclosure-based environmental regulation.The former reduces the pollution discharge costs of enterprises and enables enterprises to have more capital for outward foreign investment.The latter strengthens domestic environmental protection supervision,and enterprises choose to invest in "pollution havens" to reduce emission costs.Both of which promote foreign direct investment of enterprises.Only highly productive firms are able to translate innovative capabilities into productivity gains.In short,the carbon market advanced policy promotes outward foreign direct investment by strengthening informationdisclosure-based environmental regulations and replacing other market-incentive-based environmental regulations.Finally,based on the above conclusions,combined with the goals of environmental protection in the new era and the status quo of outward foreign investment,this paper puts forward various policy suggestions.