Does the Carbon Emissions Trading Scheme Affect Corporate Cash Holding Levels? Evidence from China’s A-Share Market

DOI

10.2991/978-94-6239-640-1_6How to use a DOI?

Keywords

carbon emissions trading scheme; DID; cash holding; Porter hypothesis

Abstract

Leveraging China’s carbon emissions trading scheme (ETS) as a quasi-natural experiment, this study employs a difference-in-differences (DID) design with data from A-share listed firms (2009–2020). Contrary to existing evidence from developed markets, we find that ETS reduces corporate cash holdings, with robustness confirmed by alternative measures and PSM-DID. Heterogeneity analyses show stronger effects for firms with higher financing constraints, higher financial risk, and lower financialization levels, highlighting liquidity vulnerability as a key factor. Our findings uncover contextual heterogeneity in environmental regulation outcomes and provide policymakers with actionable insights for designing differentiated ETS mechanisms in developing economies.

Copyright

© 2026 The Author(s)

Open Access

Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

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TY  - CONF
AU  - Menglin Li
PY  - 2026
DA  - 2026/04/20
TI  - Does the Carbon Emissions Trading Scheme Affect Corporate Cash Holding Levels? Evidence from China’s A-Share Market
BT  - Proceedings of the 2026 5th International Conference on Big Data Economy and Digital Management (BDEDM 2026)
PB  - Atlantis Press
SP  - 58
EP  - 68
SN  - 2352-5428
UR  - https://doi.org/10.2991/978-94-6239-640-1_6
DO  - 10.2991/978-94-6239-640-1_6
ID  - Li2026
ER  -