Green Finance Reform and Innovation Pilot Zone Policy and Market Value of High Pollution Enterprises: A Quasi Natural Experiment Based on the DID Model

Abstract

Driven by the strategic goals of “carbon peak and carbon neutrality,” green finance has become a key instrument for facilitating the green transition of high-emission enterprises and improving market-based environmental governance. This study takes the 2017 Green Finance Reform and Innovation Pilot Zones policy as a natural experiment. Using a sample of China’s A-share listed high-emission firms from the first quarter of 2012 to the fourth quarter of 2018, it employs a two-way fixed-effects difference-in-differences model to examine the impact of green finance policies on the market value of these firms and the dynamic pattern of this impact. The results show that in the short term, the pilot zone policy significantly reduced the market valuation of high-emission enterprises in the pilot regions. This negative effect exhibits a clear time pattern: as the market gradually absorbs relevant information and adjusts expectations, the negative impact first intensifies and then weakens. Robustness checks, including parallel trends tests, placebo tests with random policy timing, and tests with randomly selected treatment groups, confirm the reliability of the findings. This study contributes to the literature on the microeconomic consequences of green finance policies and corporate asset pricing, while also providing empirical insights for governments aiming to refine green finance policies, for high-emission firms seeking to mitigate policy shocks, and for capital markets intending to foster green investment concepts.