The Impact of Carbon Market Trading Prices on Corporate Green Innovation

The Impact of Carbon Market Trading Prices on Corporate Green Innovation | Research Square window.SnipcartSettings = { analytics: { enabled: false } }; (function() { var accessVector = localStorage.getItem('access_vector') || ''; window.dataLayer = window.dataLayer || []; if (accessVector) { window.dataLayer.push({ user: { profile: { profileInfo: { snid: accessVector } } } }); } })(); (function(w,d,s,l,i){w[l]=w[l]||[];w[l].push({'gtm.start':new Date().getTime(),event:'gtm.js'});var f=d.getElementsByTagName(s)[0],j=d.createElement(s),dl=l!='dataLayer'?'&l='+l:'';j.async=true;j.src='https://www.googletagmanager.com/gtm.js?id='+i+dl;f.parentNode.insertBefore(j,f);})(window,document,'script','dataLayer','GTM-K279D39R'); Browse Preprints In Review Journals COVID-19 Preprints AJE Video Bytes Research Tools Research Promotion AJE Professional Editing AJE Rubriq About Preprint Platform In Review Editorial Policies Our Team Advisory Board Help Center Sign In Submit a Preprint Cite Share Download PDF Article The Impact of Carbon Market Trading Prices on Corporate Green Innovation Yaoxiaoxue hong, Heng Xu, Chang Yu This is a preprint; it has not been peer reviewed by a journal. https://doi.org/ 10.21203/rs.3.rs-7533824/v1 This work is licensed under a CC BY 4.0 License Status: Under Review Version 1 posted 11 You are reading this latest preprint version Abstract This study investigates the impact of carbon market prices on corporate market competition and green technological innovation in high-carbon industries in China. We develop a game-theoretic model to analyze the effects of carbon emission restrictions on enterprises and their market competition, measured by the Herfindahl-Hirschman Index (HHI). Using data from A-share listed companies in eight major regional carbon markets from 2013 to 2021, the results indicate that rising carbon prices intensify market competition by promoting substantive green technological innovation, which reduces firms’ reliance on carbon emission quotas and enhances their competitive advantage. Furthermore, we identify a threshold effect where corporate innovation capabilities significantly influence the relationship between carbon prices and market competition. Enterprises with higher innovation capabilities respond more effectively to carbon pricing, increasing their investment in green innovation. Heterogeneity tests reveal that the impact of carbon pricing is more pronounced in state-owned enterprises and firms with lower environmental responsibility scores. These findings provide valuable insights into the mechanisms of carbon market policies and their role in fostering green economic transitions. The main contributions of this research include the development of a novel game-theoretic model to examine the mechanism driving these dynamics and the identification of a threshold effect of carbon pricing, providing valuable insights into the role of carbon market policies in promoting a green economic transition. Business and commerce/Economics Social science/Economics Earth and environmental sciences/Environmental sciences Earth and environmental sciences/Environmental social sciences Carbon market Green technological innovation Carbon pricing Market competition Innovation capability Environmental regulation Full Text Additional Declarations No competing interests reported. Cite Share Download PDF Status: Under Review Version 1 posted Editorial decision: Revision requested 20 Dec, 2025 Reviews received at journal 14 Nov, 2025 Reviews received at journal 08 Nov, 2025 Reviews received at journal 02 Nov, 2025 Reviewers agreed at journal 15 Oct, 2025 Reviewers agreed at journal 15 Oct, 2025 Reviewers agreed at journal 02 Oct, 2025 Reviewers invited by journal 24 Sep, 2025 Editor assigned by journal 10 Sep, 2025 Submission checks completed at journal 09 Sep, 2025 First submitted to journal 04 Sep, 2025 You are reading this latest preprint version Research Square lets you share your work early, gain feedback from the community, and start making changes to your manuscript prior to peer review in a journal. As a division of Research Square Company, we’re committed to making research communication faster, fairer, and more useful. We do this by developing innovative software and high quality services for the global research community. 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Also discoverable on Platform About Our Team In Review Editorial Policies Advisory Board Help Center Resources Author Services Accessibility API Access RSS feed Manage Cookie Preferences © Research Square 2026 | ISSN 2693-5015 (online) Privacy Policy Terms of Service Do Not Sell My Personal Information {"props":{"pageProps":{"initialData":{"identity":"rs-7533824","acceptedTermsAndConditions":true,"allowDirectSubmit":false,"archivedVersions":[],"articleType":"Article","associatedPublications":[],"authors":[{"id":524597757,"identity":"69146b8c-1818-4a2e-84cd-aabfc8d411c2","order_by":0,"name":"Yaoxiaoxue hong","email":"","orcid":"","institution":"Beijing Union University","correspondingAuthor":false,"prefix":"","firstName":"Yaoxiaoxue","middleName":"","lastName":"hong","suffix":""},{"id":524597758,"identity":"04995dcc-14e7-4612-bc63-bf2e13fdb490","order_by":1,"name":"Heng Xu","email":"","orcid":"","institution":"China University of Political Science and 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