Scholarlink

<p>Arguments have been raised on whether subsidies squeeze out the original investment in carbon emission reduction (CER) or leverage more investment, while incorporating a firm’s focus into research may help reach a consensus. In accordance with legitimacy theory, this study proposes that a firm’s focus determines whether subsidies exert a crowding-out or leveraging effect and introduces the green subsidy ratio (GSR) and financial slack (FL). Using a sample of 8407 observations from listed companies in China, this study employs threshold models to measure the effect of subsidies on CER. Results show that when the GSR exceeds a threshold, the positive effect of subsidies on CER is enhanced. Specifically, subsidies have a greater CER effect in firms with low FL, whereas the effect weakens in firms with high FL. These findings validate that a firm’s focus influences whether subsidies exhibit a crowding-out or leveraging effect. Accordingly, policymakers should incorporate firms’ GSR and FL indicators into the selection criteria for subsidies. The government can predict the efficiency of subsidies in CER by incorporating these factors, thereby optimizing the selection process for recipients.</p>

错误：搜索内容不能为空，请输入英文关键词
错误：关键词超出字数限制，请精简
高级检索

Do subsidies always incentivize firms to reduce carbon emissions? evidence from listed companies in China

  • 期刊论文

  • 发表日期：

    2025年5月16日

查看全文
  • Chengxu Zhou,
  • Xiaoyang Li,
  • Ruihan Liu,
  • Yan Liu

摘要

Arguments have been raised on whether subsidies squeeze out the original investment in carbon emission reduction (CER) or leverage more investment, while incorporating a firm’s focus into research may help reach a consensus. In accordance with legitimacy theory, this study proposes that a firm’s focus determines whether subsidies exert a crowding-out or leveraging effect and introduces the green subsidy ratio (GSR) and financial slack (FL). Using a sample of 8407 observations from listed companies in China, this study employs threshold models to measure the effect of subsidies on CER. Results show that when the GSR exceeds a threshold, the positive effect of subsidies on CER is enhanced. Specifically, subsidies have a greater CER effect in firms with low FL, whereas the effect weakens in firms with high FL. These findings validate that a firm’s focus influences whether subsidies exhibit a crowding-out or leveraging effect. Accordingly, policymakers should incorporate firms’ GSR and FL indicators into the selection criteria for subsidies. The government can predict the efficiency of subsidies in CER by incorporating these factors, thereby optimizing the selection process for recipients.