Jurnal Ekonomi Malaysia

The Impact of Carbon Policy and Green Investment on the Firm Value of Listed Companies in China

Faculty of Economics and Management
Universiti Kebangsaan Malaysia
43600 UKM Bangi, Selangor, MALAYSIA.

P156085@siswa.ukm.edu.my

Faculty of Economics and Management
Universiti Kebangsaan Malaysia
43600 UKM Bangi, Selangor, MALAYSIA.

fatin@ukm.edu.my

Abstract

This study examines the impact of green investment (GI) and carbon policy (Policy) on the firm value (Tobin’s Q) of listed companies in China that obtained carbon emissions trading rights in 2013. The research sample comprises 102 A-share-listed companies subject to China’s emissions control scheme between 2001 and 2020, and firm-level panel data are constructed. The Generalized Method of Moments is employed to estimate the traditional Tobin’s Q model that incorporates green investment variables. The findings reveal that ROE has a significant and positive relationship with current firm value, whereas lagged Tobin’s Q and firm size have a negative relationship. There is scope to raise the value of firms through carbon policy. However, green investment is significant when carbon policy is regulated in the model. This paper integrates carbon policy, green investment, and firm value into a unified dynamic analysis framework. Our findings support the strong Porter hypothesis, indicating that the economic benefits of innovation compensation are not automatically realised, and the policy context is critical for the value-creating effects of green investment. Investors should focus on the quality of a company’s green investments and their value transformation capabilities. Corporate managers should allocate green investment funds to avoid the risk of market undervaluation. Policymakers should improve the carbon market pricing mechanism to provide companies with a more predictable institutional environment

Keywords

Chinese listed firms; corporate performance; Emission trading system; GMM.; Tobin’s Q

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Xinyi, Wang and Said, Fathin Faizah

(2026). The Impact of Carbon Policy and Green Investment on the Firm Value of Listed Companies in China. Jurnal Ekonomi Malaysia, 60(2), -.

@article{xinyi2026the,
  title={The Impact of Carbon Policy and Green Investment on the Firm Value of Listed Companies in China},
  author={Xinyi, Wang and Said, Fathin FaizahXinyi, Wang and Said, Fathin Faizah},
  journal={Jurnal Ekonomi Malaysia},
  volume={60},
  number={2},
  pages={–},
 

year={2026},
}

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