Template-Type: ReDIF-Paper 1.0
Title: Management Practices and Climate Policy in China
Author-Name: Soo Keong Young
Author-Email: 
Author-Name: Ulrich J. Wagner
Author-Email: 
Author-Name: Peiyao Shen
Author-Email: 
Author-Name: Laure de Preux
Author-Email: 
Author-Name: Mirabelle Muȗls
Author-Email: 
Author-Name: Ralf Martin
Author-Email: 
Author-Name: Jing Cao
Author-Email: 
Classification-JEL: D22, O31, Q48, Q54
Keywords: climate policy; firm behavior; management practices; emissions trading scheme; policy 
evaluation


Abstract: We investigate how management quality moderates the impact of carbon pricing on Chinese firms. 
Based on interviews with managers and lead engineers at manufacturing firms in Hubei and Beijing, we 
construct a novel index on climate-change related management practices and link it to firm data from 
various sources. We document higher average productivity and more green innovation among firms that 
are well managed according to this index. In an event study of the introduction of regional cap-and-trade 
schemes for CO2, we analyze how these management practices interact with treatment. While treated 
firms reduced coal consumption more than control firms, this effect is statistically significant only for 
well-managed firms. The reduction could have been 25% greater if badly managed firms had been well 
managed. Our study highlights that good management practices, in particular energy monitoring, 
enhance the effectiveness of market-based climate policies by enabling firm to rationally comply with 
them. 

Note: 
Length: 70
Creation-Date: 2023-09
Revision-Date:
File-URL: https://www.crctr224.de/research/discussion-papers/archive/dp466
File-Format: application/pdf
Handle: RePEc:bon:boncrc:CRCTR224_2023_466