The impact of carbon trading on the financialization of non-core firms: Evidence from a semi-controlled experiment in China.

This study examines whether and how carbon trading policy affects the financialization of unrelated firms using China's emissions trading scheme as a quasi-natural experiment.

We find that carbon trading policy has a significant and long-term suppressive effect on firms' financialization.

In addition, we investigate potential channels through which carbon trading policies may affect financialization and find that they constrain financialization by reducing financial constraints.

Finally, we demonstrate that the relationship between carbon trading policy and financialization of unrelated firms depends on firm ownership, region, and industry competition.