Fostering Enterprise Green Innovation: an Empirical Analysis of China’s Energy Use Rights Trading System

In the face of escalating global energy consumption and rising CO 2 emissions, this research investigates the pivotal role played by China’s Energy Use Rights Trading (EURT) system in promoting Enterprise Green Innovation (EGI) within industrial enterprises. The study employs a rigorous Quasi-Natural Experiment (QNE) approach, drawing on a dataset of Chinese-listed A-share enterprises from 2015 to 2022. The research utilizes the Propensity Score Matching Double Difference-in-Differences (PSM-DID) model to explore the intricate dynamics between the EURT system and EGI. The findings underscore the significant impact of the EURT system on fostering innovative green technologies within enterprises. Moreover, the study reveals that the EURT system has a particularly pronounced influence on high energy-consuming enterprises (HECEs) due to stringent energy consumption targets, thereby enhancing their EGI initiatives. Differentiated responses are observed between state-owned enterprises (SOEs) and non-SOEs, highlighting the nuanced nature of enterprise reactions to the EURT system. Theoretical implications center on the symbiotic relationship between policy mechanisms and green technology adoption, while managerial implications emphasize the transformative potential of the EURT system in positioning enterprises as sustainability leaders. Policy implications stress the need for tailored energy trading policies to accelerate the transition toward greener economies. This research contributes to advancing our comprehension of the interplay between policy interventions and green innovation, offering a roadmap for fostering sustainable practices within the corporate sector, ultimately contributing to a greener, more environmentally responsible future.