Active adaptation or short-run profit pursuing? Carbon emissions trading and corporate financialization: evidence from Chinese listed companies

As an important environmental regulation policy, carbon emissions trading (CET) undoubtedly brings significant pressure to enterprises. However, its impact on corporate investment, particularly its financialization tendency, has been rarely studied. Based on panel data of listed companies and the difference-in-differences (DID) model, this study examines the impact of CET on corporate financialization and its mechanism. The results show that after the short-run profit pursuing motivations dominate and promote corporate financialization. Heterogeneity analysis and mechanism testing results indicate that the strengthening effect is mainly manifested in non-state-owned enterprises, small and medium-sized enterprises, polluting enterprises, and high-profit enterprises. In addition, quota auctions and government intervention can significantly suppress the corporate financialization. Therefore, the government needs to fully consider the influence of corporate heterogeneity and carry out differentiated CET policies. The trading system should be adjusted promptly and scientifically according to the actual circumstances. At the same time, the government can consider adopting measures such as subsidies to alleviate the financing problems of enterprises, thereby encouraging technological innovation and promoting sustainable development.