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How Do Stringent Climate Policies Influence Carbon Intensity and Profitability? Insights from the Chinese Market

Y. Liu et al.

Economics: The Open Access, Open Assessment E-journal2026https://doi.org/10.1515/econ-2025-0189article
ABDC B
Weight
0.50

Abstract

This study investigates the economic and environmental impacts of China’s Green Finance Reform and Innovation Pilot Zone (GFRIPZ) program, a climate policy designed to promote sustainability by reducing carbon emissions intensity (CEI) among high-energy-consuming firms. Using a dataset of Chinese A-share listed companies, triple-difference estimations reveal that the GFRIPZ program significantly lowers CEI. This outcome is partly driven by increased investments in green innovation, as firms enhance their research and development efforts to align with environmental goals. Despite these advancements, the program presents a trade-off by exerting downward pressure on profitability. However, green finance policies mitigate financing constraints, supporting firms’ financial stability under sustainability-focused reforms. Our findings explain the interplay between environmental outcomes and financial performance, highlighting the necessity of balancing sustainable development and economic growth.

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https://doi.org/https://doi.org/10.1515/econ-2025-0189

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@article{y.2026,
  title        = {{How Do Stringent Climate Policies Influence Carbon Intensity and Profitability? Insights from the Chinese Market}},
  author       = {Y. Liu et al.},
  journal      = {Economics: The Open Access, Open Assessment E-journal},
  year         = {2026},
  doi          = {https://doi.org/https://doi.org/10.1515/econ-2025-0189},
}

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Evidence weight

0.50

Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40

F · citation impact0.50 × 0.4 = 0.20
M · momentum0.50 × 0.15 = 0.07
V · venue signal0.50 × 0.05 = 0.03
R · text relevance †0.50 × 0.4 = 0.20

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