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The Green Rivalry Threat: Emission Trading Scheme and Spillover

Tracks
Jade 1
Monday, July 1, 2024
4:20 PM - 4:45 PM

Presenter

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Dr June Cao
Senior Lecturer
Curtin University

The Green Rivalry Threat: Emission Trading Scheme and Spillover

Biography

June is a senior lecturer in accounting. June’s core research focus is the burgeoning areas such as carbon accounting, carbon disclosure/assurance, green innovations, ESG/CSR, and the cutting edge of sustainability reporting and green supply chain management. Her commitment to research excellence is evidenced by high-quality impactful research outputs published in A*/A/Q1 journals such as the British Accounting Review, Energy Economics, Journal of International Accounting Research, International Journal of Auditing, Journal of Accounting Literature, Accounting and Finance, Issues in Accounting Education, Journal of Financial Stability, and among others. Her research performance and teaching excellence have been recognized by several prestigious research and teaching accolades. She is a member of CPA Australia, CA ANZ, and AFAANZ Technical Committee, a fellow of the Higher Education Academy (FHEA) and an associate fellow of Curtin Academy. She is also an accredited PREP reviewer and FHEA assessor/mentor. She is on the Editorial Advisory Board of the Journal of Accounting Literature and the lead guest editor of the Pacific Accounting Review.
Mr Zijie Huang
PhD Candidate
Curtin University

The Green Rivalry Threat: Emission Trading Scheme and Spillover

Abstract

We examine whether and how firms subject to stringent environmental regulation have a peer effect on unconstrained firms’ green innovations. Using a generalized difference-in-differences model, we find that unconstrained firms significantly increase their green innovations in response to the heightened green innovations of constrained firms after China’s Emission Trading Scheme (ETS) pilot. We document the competitive threat as the underlying mechanism, consistent with the rivalry-based theory. Our heterogeneity analyses show that peer effects are more pronounced among non-ETS firms characterized by leader status, high public scrutiny, higher financial constraints, more institutional investors, and under-investment. We further find that these peer effects significantly increase non-ETS firms’ economic performance and green revenues. Our research offers valuable insights and ex-ante evidence for policymakers and practitioners to further develop decarbonization regulation.

Biography

Zijie Huang is a second-year PhD candidate in Accounting at Curtin University, specializing in environmental accounting, corporate governance, green supply chain, and ESG/CSR.

Chair

Steven Cahan
Professor
University of Auckland


Discussant

Qing Wang
Ph.D. candidate
Monash University

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