Whether the Development of Carbon Finance Contributed to Industrial Optimization and Upgrading: Evidence from A Chinese Carbon Emissions Trading Pilot

In recent years, there has been a lot of literature on carbon finance contributing to industrial optimization and upgrading, but the causal endogeneity between them has not been well addressed. The carbon emissions trading policy is a major exploration practice in the construction of China's carbon financial market. Using this natural event, data from 30 provinces during 2008-2018 are selected and the Differences-in-Differences method is applied to comprehensively analyze the impact of carbon emissions trading policy on industrial optimization and upgrading in pilot regions and its mechanism of action. And to conclude the driving effect of carbon finance development on industrial optimization and upgrading based on greatly reduced endogeneity. The conclusions show that carbon emissions trading policies can effectively promote industrial upgrading in the pilot regions. Further mechanism research also shows that carbon emissions trading policies promote industrial upgrading in the pilot regions through three main channels: enterprise innovation efficiency, international trade, and consumer demand, with the most obvious effect of enterprise innovation efficiency. This paper concludes with recommendations for industrial upgrading based on a carbon finance perspective.