The impact of energy-consuming rights trading on green total factor productivity in the context of digital economy: Evidence from listed firms in China

Enhancing green total factor productivity is a fundamental in attaining sustainable development. Based on China's energy-consuming rights trading (ECRT), the study to examine its effect on firms' green total factor productivity (FGTFP) at the micro level is lacking. Meanwhile, it is also worth exploring what new opportunities the rapid development of the digital economy brings to ECRT. In this paper, we adopt the super-efficient EBMGML model to measure FGTFP. On this basis, we assess the impact of ECRT on FGTFP by matching the data of Ashare listed firms in China and provincial data from 2010 to 2019 while exploring the moderating effect of the digital economy. We reveal that ECRT significantly boosts FGTFP. This finding is supported by the synthetic control method, PSM-DID, the dual machine learning method, and other robustness testing methods. The mechanism analysis confirms that ECRT improves FGTFP mainly through three channels: promoting firms' green technological innovation, resolving firms' excess capacity, and alleviating firms' financial resource mismatch. The moderating effect emphasizes that the digital economy strengthens the contribution of ECRT to FGTFP. In addition, through heterogeneity analysis, we observe that the green development effect of ECRT is more prominent in the samples of state-owned enterprises, high energy-consuming firms, and firms with higher relocation costs. Meanwhile, we uncover that the positive moderating effect of the digital economy needs to be supported by the higher intensity of intellectual property protection and the level of digital infrastructure development in the region. Our study provides a new empirical instrument for emerging economies and developing countries to realize economic green transformation through environmental regulation.