Speaker: Dr. Zhiwen Ye, Assistant Professor (The Hong Kong Polytechnic University)

Chair: Dr. Li Yu, Assistant Professor (Li Anmin Institute of Economic Research, Liaoning University)

Guest Discussant: Dr. Shukang Xiao, Assistant Professor (Li Anmin Institute of Economic Research, Liaoning University)

Time: Friday, November 13, 2026, 10:00–11:30 (Beijing Time)

Venue: Meeting Room 483, Economics Building, Puhe Campus, Liaoning University

Language: Chinese/English

Abstract:

Carbon pricing raises the marginal return to abatement and productivity upgrading, but its real effects depend on whether firms can finance the required adjustment. Using China’s 2013–2014 emissions trading scheme pilots as a quasi-natural experiment, we trace the financing mechanism through which policy-induced activities are funded. ETS-exposed firms raise the liabilities-to-assets ratio by 1.5 percentage points, but the response operates entirely outside conventional debt: interest-bearing debt, bank loans, and bonds are unchanged, while non-interest-bearing current liabilities rise, trade credit expands, payout falls, and tax avoidance intensifies. These financing shifts coincide with a 14% rise in R&D and a 4.5% rise in total factor productivity. Liquidity ratios fall simultaneously, revealing a liquidity–productivity trade-off in which firms finance R&D investment by compressing short-run financial slack. All effects are concentrated jointly among financially constrained firms with poor baseline environmental performance. The real effectiveness of market-based climate policy in credit-constrained economies depends critically on non-debt financing margins.

Speaker Profile:

Zhiwen Ye is an Assistant Professor of Economics in the School of Accounting and Finance at The Hong Kong Polytechnic University. He received his Ph.D. in Economics from the University of Calgary, Canada. His main research interests include corporate finance, environmental economics, and labor economics. His research has been published in international journals such as the Journal of Environmental Economics and Management, the European Economic Review, Economic Inquiry, and Finance Research Letters.