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

Abstract

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.

Keywords

Low-carbon city pilot Financing and investment Productivity effect Energy-intensive enterprises

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