Can Carbon Neutrality Commitment Contribute to the Sustainable Development of China’s New Energy Companies?

Abstract

Developing new energy is one of the most important measures to implement global carbon neutrality. Under the constraints of carbon emission reduction, the question of how to achieve the sustainable development of new energy enterprises has become an important issue among managers and investors. This study selects Chinese listed companies in the new energy industry as the research sample, employs the DID method and uses panel data to explore the role of carbon neutrality commitment in the sustainable growth of new energy companies. The results show that the carbon neutrality commitment has greatly improved the sustainable development of Chinese new energy companies, with the internal profitability and external investor sentiment of the enterprises being important mediating variables. Moreover, the effect of the carbon neutrality commitment on the sustainable growth of non-state-owned new energy firms is much more significant compared with that of state-owned enterprises, and the effect is more robust in the east than in the central and western regions. Based on the conclusions, this study provides practical implications for managers, investors and policymakers in order to promote the sustainable growth of new energy firms.

1. Introduction

Along with the swift development of the Chinese economy, the reliance on energy is gradually increasing, as is the demand. However, the widespread use of non-renewable fossil fuels releases large amounts of greenhouse gases (GHG), particularly CO₂, into the atmosphere, which is one of the primary causes of climate change today. China, as the world’s largest carbon emitter [1], actively engages in international climate governance and diligently executes its emission reduction obligations under the Paris Agreement, which is critical to reaching global carbon neutrality. During the 75th session of the United Nations General Assembly on 22 September 2020, the Chinese government announced that China would scale up its Nationally Determined Contributions (NDCs) by adopting more vigorous policies and measures and strive to peak CO₂ emissions before 2030 and achieve carbon neutrality before 2060 [2]. This is China’s solemn commitment to a community with a shared future for mankind. As a major strategic decision, the carbon neutrality commitment provides guidelines for China’s high-quality economic development and serves as the foundation for China’s actions to address climate change. After years of theoretical research and application in various industries, new energy has emerged as the most viable method to battle climate change and mitigate global warming [3]. The development of new energy sources has become a necessity for countries worldwide to achieve carbon neutrality. Under such circumstances, it is necessary for China to intensively develop wind, solar, biomass, ocean and geothermal energy, as well as other new energy sources. In 2020, the global demand for renewable energy increased by 3% [4], with China being the largest contributor to renewable energy growth [5]. Nevertheless, renewable energy projects still remain a challenge, especially for developing countries [6].

We intend to explore the impact of carbon neutrality commitment on new energy companies in this paper. The reason is that the new energy sector, as an emerging industry, needs more support from national policies. It has been shown that incentive-based policies have a positive effect on new energy companies. On the one hand, some scholars have looked into the impact of government policies on new energy companies from the perspective of subsidies. Subsidies from the government can encourage R&D innovation in new energy firms [7] and improve financial performance [8,9]. On the other hand, there are several investigations into the influence of financial support on new energy firms. Green credit may raise the value of new energy enterprises [10], and stock prices can dramatically rise when companies announce the issuance of green bonds [11]. However, to the best of our knowledge, there are few studies on the impact of environmental and climate policies on new energy companies at the academic level. Obviously, new energy companies may have a positive impact on the environment, and environmental and climate policies can generate feedback effects on the new energy industry. Carbon neutrality is an important policy in the current global response to climate change [12]. Therefore, we seek to determine how the carbon neutrality commitment affects the development of new energy enterprises.

This study attempts to address the following three questions. First, how does the carbon neutrality commitment affect the development of companies in the new energy industry? Second, what are the impact mechanisms through which the carbon neutrality commitment promotes the development of new energy companies? Third, does the effect of the carbon neutrality commitment on new energy companies vary with the company’s characteristics and external environment? To answer these questions, this study explores the causal relationship between the carbon neutrality commitment and new energy enterprises’ value, using the panel data of Chinese A-share listed manufacturing companies from January 2019 to March 2022 as a sample. The results obtained in this paper may effectively encourage more capital flows into new energy industries while guiding enterprises to achieve low-carbon transition, promoting green economic development and ecological civilization construction while improving their value.

The remainder of this paper is organized as follows. Section 2 reviews the literature and devises hypotheses based on the theory. Section 3 introduces the methodology, variable selection and data sources. Section 4 presents the empirical findings. Section 5 presents the robustness tests. Finally, Section 6 concludes and provides related suggestions.

2. Literature Review and Theoretical Hypothesis

2.1. Literature Review

2.1.1. Carbon Neutrality Commitment

In recent years, more and more research on carbon neutrality has been conducted. The hotspots of research on carbon neutrality are mainly focused on four aspects: carbon-neutral energy transition, the development of carbon-neutral technology, evaluation of carbon neutrality effects, and industry case studies of carbon neutrality [13]. These studies look at carbon neutrality as an ultimate goal rather than the event itself. For example, some scholars explore the paths to achieving carbon neutrality [14]. Sun et al. [15] forecast that it would be difficult to achieve carbon neutrality by 2060 in most provinces, and the provincial carbon neutrality is concentrated between 2058 and 2070. Wen et al. [16] attempt to look at practical solutions for China to reach carbon neutrality by 2060. There is a consensus that renewable energy is considered to play an important role in achieving carbon neutrality commitment [17,18,19,20].

However, we choose to regard the carbon neutrality commitment as an environmental and climate policy and explore its impact on new energy companies. In other words, this study considers the event wherein China commits to achieving carbon neutrality as an exogenous event and discusses whether it can promote the sustainable development of new energy enterprises.

2.1.2. New Energy Companies’ Reactions to Policies

Currently, research on the impact of policies on new energy enterprises mainly focuses on the perspective of government subsidies and financial policies.

The first is the impact of government subsidies on new energy companies. On the one hand, the innovation activities of new energy enterprises are one of the major research issues of government subsidies, and the conclusions are basically divided into two types: the existence of the crowding-in effect or the existence of the crowding-out effect. Scholars have come to different conclusions, and these conclusions are of some significance. Some scholars support the crowding-in effect, which means that government subsidies have a positive effect on innovation in new energy firms [21]. Government subsidies can promote R&D investment in new energy enterprises [22,23,24], and enhance their R&D intensity [25]. However, some scholars support the crowding-out effect and argue that government subsidies have an incentive effect only when they are within a reasonable range [26]. Wu et al. [27] find that there is an inverted U-shaped relationship between the size of subsidies and the innovation investment of new energy companies. On the other hand, the financial performance of government subsidies on new energy companies has been studied by many scholars. The findings are broadly divided into two categories: positive and negative effects. Some scholars believe that subsidies have a positive effect on the financial performance of new energy companies. Government subsidies improve the financial performance of new energy companies [28]. However, some scholars argue that subsidies do not have an entirely positive effect on the financial performance of new energy companies. Government subsidies have a negative impact on the short-term financial performance of new energy companies and a positive impact on their long-term financial performance [29].

The second is the impact of financial policies on new energy companies. At present, green finance plays a significant role in promoting environmentally friendly growth and achieving carbon neutrality commitment, which uses more financial sources to support low-carbon economic activities [30]. There are several investigations into the influence of the policies on new energy companies from the perspective of green financial policies. The most researched green finance policy is green credit. Zhang et al. [31] conclude that green credit guidelines can promote renewable energy investment. Lai et al. [10] maintain that green credit greatly enhances the value of new energy companies.

In summary, the impact of the policies on new energy companies has been studied, mainly from the perspectives of government subsidies and financial support. However, there has been limited research on the development of new energy firms based on environmental and climate policies. In the article closest to the study in this paper, Dong et al. [32] find that the carbon neutrality commitment has a significant negative impact on the returns of stocks related to carbon neutrality. However, stock returns can only represent the capital market’s reaction to the carbon neutrality commitment, i.e., the growth in the market value of listed new energy companies. Additionally, it cannot account for the long-term increase in the entity value of new energy firms.

With these considerations, first, this study adds to the previous literature on policy and economic impacts by linking the carbon neutrality commitment to the sustainable development of new energy enterprises. Second, for new energy companies, long-term growth in enterprise value is key to achieving sustainable development. Therefore, this study uses Tobin’s Q to represent the sustainable growth of new energy enterprises. From its definition, the concept of Tobin’s Q covers both capital market valuation and physical investment. It can realize the organic combination of the capital market and real industry [33]. The practical significance of this study is that, since new energy companies are inherently environmentally beneficial, exploring the link between the carbon neutrality commitment and the value of new energy companies can explain how the carbon neutrality commitment contributes to the co-development of the environment and the economy.

2.1.3. The Transmission Mechanism of Policies on New Energy Companies

Some scholars have analyzed the intermediary mechanism of the impact of policies on new energy enterprises, mostly from the perspectives of financing and R&D. Wang et al. [34] suggest that the new energy vehicle enterprises that enter the promotion catalog can increase corporate profits and ease financing constraints to promote innovation. According to Lu et al. [35], R&D investment plays a positive mediating effect for Chinese new energy companies to achieve higher efficiency with the support of government financing.

Although there has been little research on the factors influencing the value of new energy enterprises, numerous aspects have been researched to influence the value of firms. There is widespread agreement that increased profitability may greatly increase company value [36], and that increased profitability is the mechanism via which green financing and green innovation impact enterprise value [33,37]. The value of a company in the capital market is mostly represented in its shares. According to the literature, investor mood has a major influence on stock prices [38,39], and has a negative association with future stock returns [40,41].

Although previous research has explored the mechanism of the impact of policies on new energy enterprises, the mediating role of profitability and investor sentiment has rarely been considered. As a result, this study employs the profitability and investor sentiment of the enterprises as mediating variables to investigate whether carbon neutrality commitment affects new energy business value via the transmission of profitability and investor sentiment. This study results in a more comprehensive understanding about the impact mechanism between carbon neutrality commitment and the value of new energy firms, and complements the knowledge about the mediating effect between policy and new energy firms.

2.1.4. Heterogeneous Impacts of Policies on New Energy Companies

The implementation effect of policies may vary with the ownership and regional location of enterprises [42]. There is a clear consensus that, under the influence of the policies, new energy companies in the eastern area outperform those in the central and western regions in some respects. Therefore, the policy has a stronger effect on promoting enterprises in the eastern region than on those in the central and western regions [7,43].

From the standpoint of company ownership, there is no agreement on how the policies may affect new energy firms differently. Wang et al. [44] find that subsidies have a greater negative impact on non-state-owned enterprises (non-SOEs) than on state-owned enterprises (SOEs). Chen et al. [45] point out that the increase in the corporate value of government subsidies is more significant in private enterprises.

On account of this, this study also fully analyzes the heterogeneous effect of the carbon neutrality commitment on improving the value of new energy enterprises, which is of great importance for the government to achieve carbon neutrality, better improve the value of new energy enterprises and achieve a “win–win” contribution to the environment and the economy. This paper includes ownership and region in the heterogeneity analysis, determines which categories of new energy enterprises benefit from the carbon neutrality commitment and helps policymakers to promote the development of the new energy industry.

2.2. Theoretical Hypothesis

2.2.1. The Impact of the Carbon Neutrality Commitment on the Value of New Energy Companies

Enterprise development is inextricably linked to national macroeconomic policy. In the context of carbon neutrality, firms that adapt to the low-carbon transition and aggressively develop new energy sources can seize the opportunity for development and achieve long-term success. On the one hand, the announcement of the Chinese government’s carbon neutrality commitment predicts a brighter future for new energy enterprises supported by this environmental policy. This also sends a positive signal to external investors that new energy enterprises have potential and are worthy of investment, allowing them to obtain more external resources and alleviate financing constraints to improve their financing capacity and reduce their financing costs, thus increasing their corporate value. On the other hand, in order to achieve carbon neutrality, the Chinese government may use various fiscal and financial policy tools to allocate resources in a planned manner, changing the external environment faced by new energy enterprises, which has a significant impact on their business conditions and financial behavior. Based on this, this paper proposes Hypothesis 1:

Hypothesis 1.

The carbon neutrality commitment can significantly improve the value of new energy enterprises.

2.2.2. The Impact Mechanism of the Carbon Neutrality Commitment on the Value of New Energy Companies

From the perspective of the companies themselves, the announcement of the carbon neutrality commitment can enable enterprises to make full use of the positive announcement effect brought by policies to improve their enthusiasm to engage in the new energy industry, so that new energy enterprises can focus more on carrying out their main business, gain a competitive edge in the market and realize the improvement of enterprise profitability.

From the perspective of external stakeholders, new energy companies are representative, environmentally friendly enterprises that comply with the objective requirements of the government and society to build an ecological civilization. In the process of achieving carbon neutrality, new energy firms fulfill their social responsibility, which is favorable to gaining a good corporate reputation. On the one hand, corporate environmental responsibility may greatly boost firm profitability [46]. A substantial amount of evidence also supports the argument that improved corporate profitability contributes to higher corporate value. On the other hand, new energy businesses are willing to share more environmental information to preserve and create a better social image. Active disclosure of information can reduce the asymmetric information that exists between new energy firms and external investors, increasing investor trust in the capital market. Furthermore, strong investor sentiment suggests that investors may be more active in purchasing corporate shares, which helps to boost the firm’s value. Based on the above analyses, this study proposes the following Hypothesis 2:

Hypothesis 2a.

The carbon neutrality commitment can improve the value of new energy enterprises, via the profitability channel.

Hypothesis 2b.

The carbon neutrality commitment can improve the value of new energy enterprises, via the investors’ sentiment channel.

2.2.3. Heterogeneous Impact of the Carbon Neutrality Commitment on the Value of New Energy Companies

Due to their different ownership structures and the economic environment of the region in which they are located, enterprises may react differently to certain events.

First, enterprises with different ownership properties may react differently to the policy due to differences in cognitive logic, institutional organization and resource endowment. As a result, the response to the carbon neutrality commitment may also vary between companies of a different nature. Non-SOEs are more motivated to obey market logic since they encounter more market and environmental constraints. Furthermore, non-SOEs are more focused on efficiency and profit maximization than SOEs. Thus, they are more sensitive to policies and more driven to engage in green development activities to improve their market competitiveness.

Second, in terms of marketization, there are clear disparities across China’s eastern, central and western areas. Because the eastern area has a greater degree of economic growth and a better rule of law than the central and western regions, the implementation and enforcement of innovation policies, as well as the innovation environment, are superior to those in the central and western regions. As a result, the carbon neutrality commitment has a greater effect on new energy firms in China’s eastern area than on those in the central and western regions. Based on the above analysis, Hypothesis 3 of this paper is derived.

Hypothesis 3a.

The value-enhancing effect of the carbon neutrality commitment on non-state-owned new energy enterprises is more significant than that of state-owned ones.

Hypothesis 3b.

The value-enhancing effect of the carbon neutrality commitment on new energy enterprises in the eastern region is more significant than that in the central and western regions.

3. Methodology and Data

3.1. Methodology

3.1.1. Difference-in-Difference

The question examined in the article is whether the proposed carbon neutrality commitment in China has contributed to the sustainable development of new energy companies. Currently, most studies assessing the effect of a particular policy apply the Difference-in-Difference method, which, in the specific research process, treats the introduction or implementation of the policy as a quasi-natural experiment, with the subjects that produce the impact as the test group, and selects another group of samples that are not affected by the policy shock to form a control with the experimental group. It then analyzes empirically the difference in the average change produced by the policy for the two groups. The carbon neutrality commitment has given rise to a wide range of new industries and business models, especially low-carbon ones. Therefore, compared to other businesses, new energy companies have better development prospects. The carbon neutrality commitment may provide a stronger driver for new energy businesses. For new energy companies, long-term growth in enterprise value is key to achieving sustainable development. Therefore, based on the fact that China’s carbon neutrality commitment is proposed as a research background, we can effectively control the endogenous association between carbon neutrality commitment and firm value by comparing the firm value of new energy firms and non-new energy firms, while effectively identifying the policy treatment effect.

To investigate whether the carbon neutrality commitment has an impact on the value of new energy companies, this study compares whether the value of new energy companies changes before and after the carbon neutrality commitment. This study regards the carbon neutrality commitment made by the Chinese government on 22 September 2020, as a quasi-natural experiment. Then, this study establishes the experimental group (new energy companies) and the control group (non-new energy companies), and constructs a DID model to evaluate their impacts on the value of new energy companies. Drawing on Jiang et al. [47], the model is constructed as follows:

$${CV}_{it}={\beta }_0+{\beta }_1{did}_{it}+{\beta }_2{X}_{it}+{\lambda }_i+{\mu }_t+{\nu }_{it},$$

(1)

In Equation (1), the subscripts i and t indicate company and time, respectively. $CV$ is the explained variable, which indicates the value of listed companies. $did$ is the core explanatory variable, reflecting the impact of carbon neutrality commitment on the value of firms in the control and experimental groups. X is the control variable, which is essentially a series of company characteristic variables. ${\beta }_0$ is the intercept term. $\lambda$ represents the individual fixed effect of the firm. $\mu$ represents the fixed effect of time. $\mu$ represents random disturbing items.

3.1.2. Mediating Effect Method

This study mainly discusses the mediating effect of the carbon neutrality commitment on the value of new energy companies via the mechanism of investor sentiment. Drawing on Huang et al. [48], the model is constructed as follows:

$${Mediation}_{it}={\alpha }_0+{\alpha }_1{did}_{it}+{\alpha }_2{X}_{it}+{\lambda }_i+{\mu }_t+{\epsilon }_{it},$$

(2)

$${CV}_{it}={\gamma }_0+{\gamma }_1{did}_{it}+{\gamma }_2{Mediation}_{it}+{\gamma }_3{X}_{it}+{\lambda }_i+{\mu }_t+{\xi }_{it}$$

(3)

The three phases of the mediating effect paradigm are Equations (1)–(3). Among them, $Mediation$ is the intermediary variable, which comprises investor sentiment. Other variables are consistent with Equation (1). After evaluating Equation (1), this study tests Equations (2) and (3), according to the concept of the mediating effect model. The judgment for the significance of the mediating variable is based on the following three steps. First, we test the significance of the coefficient ${\beta }_1$; if ${\beta }_1$ is significant, then the next judgment can be made. Otherwise, there is no mediating effect. Second, we test the significance of the coefficients ${\alpha }_1$ and ${\gamma }_2$; if both are significant, then it can be considered that variable $Mediation$ has a significant mediating effect, and if, at the same time, ${\gamma }_1$ is not significant or its estimated value is significantly smaller than ${\beta }_1$, then the $Mediation$ variable exerts a strong mediating effect. Third, if at least one of the coefficients ${\alpha }_1$ and ${\gamma }_2$ is insignificant, a Sobel test is required to determine whether variable $Mediation$ plays a mediating role.

3.2. Variable Selection and Data Sources

3.2.1. Variable Selection

The explained variable of this study is the value of listed companies. In line with previous research, this study uses Tobin’s Q, which is calculated as the stock market capitalization plus the market value of net liabilities as a ratio of total assets, as a proxy for the companies’ value ($CV$). Tobin’s Q takes into account both the market characteristics and financial characteristics of listed companies, which is an organic combination between capital market data and entity financial data, and has been widely used in empirical research related to firm value [49,50,51].

$did$ (${did}_{it}={treat}_{it}\times {post}_{it}$) is the primary explanatory variable of this study, which indicates whether firm i is affected by the carbon neutrality commitment in time period t. $treat$ is the treatment dummy variable, whose value is 1 when the listed company is a new energy company; otherwise, it is 0. Since this study uses quarterly panel data for the empirical study, $post$ means the virtual variable of the quarter. The carbon neutrality commitment was put forward on 22 September 2020, at the end of the third quarter. Therefore, this paper took the third quarter of 2020 (2020q3) as the event time point. When t > 2020q3, $post$ = 1; otherwise, $post$ = 0. The multiplicative term is the core explanatory variable to investigate whether the carbon neutrality commitment improves the value of new energy companies. This study mainly focuses on the coefficient ${\beta }_1$. If it is positive and significant, it shows that the carbon neutrality commitment can significantly improve the new energy companies’ value.

The intermediary variables of this study are the profitability of new energy enterprises and investor sentiment. Drawing on Khalid et al. [52], this paper uses the return on total assets ($ROA$) to represent the profitability of the firm. Drawing on Baker et al. [53], this study adopts the turnover ratio ($turnover$) as the investor sentiment proxy. The $turnover$ rate can often reflect the positive level of investor investment in the stock; the higher the confidence of investors in stock, the stronger the willingness to trade for the stock.

The control variables considered, according to the literature, are as follows: (1) firm size ($size$) is indicated by the natural logarithm of total assets; (2) leverage ($lev$) is measured by the ratio of the liabilities to the total assets; (3) current ratio ($current-ratio$) is indicated by the ratio of the current assets to the current liabilities; (4) total assets turnover ($asset-turnover$) is indicated by the ratio of operating revenues to total assets; (5) the growth rate of operating revenue ($income-g$) is indicated by the increase in the operating revenue of the enterprise in the current period to the total operating revenue in the previous period; (6) ownership concentration ($top1$) is represented by the percentage of shares held by the first largest shareholder. The particular measurements for each variable are shown in

Table 1. Variable definition.

Variable	Notation	Measurement Indicators
enterprise value	$Tobi{n}^{\prime }sQ$	market value/total assets
profitability	$ROA$	net profit/total assets
investor sentiment	$turnover$	stock volumes/outstanding shares
firm size	$size$	ln (total assets)
leverage	$lev$	liability/total assets
current ratio	$current-ratio$	current assets/current liabilities
total assets turnover	$asset-turnover$	operating revenues/ total assets
the growth rate of operating revenue	$income-g$	the quarter-on-quarter growth rate of operating income
ownership concentration	$top1$	the percentage of shares held by the first largest shareholder

.

3.2.2. Data Sources

This study employs firm-level quarterly panel data from January 2019 through March 2022 for a total of 13 quarters. First, this study selects new energy companies from among Chinese listed companies, including new energy automobiles, solar energy, wind energy, nuclear energy, biomass energy enterprises and other new energy enterprises. Second, because new energy companies are primarily concentrated in the manufacturing industry, according to the 2012 SEC industry classification criteria, A-share listed manufacturing enterprises are chosen to better match the experimental and control groups. Then, enterprises listed on or after 1 January 2019, are excluded; finally, enterprises that have been treated as ST or delisted during the sample period are excluded. The remaining 2101 A-share listed manufacturing businesses, including 113 new energy enterprises, are used as the experimental group after sample selection and screening. All the sample data are selected from the CSMAR database and EastMoneyNet. Finally, all the variables are winsorized up and down by 1% to prevent the influence of outliers.

The final descriptive results of the variables are shown in

Table 2. The descriptive results of variables.

Variable	Mean	Std. Dev.	Min	Max
$Tobi{n}^{\prime }sQ$	2.105	1.427	0.840	9.507
$ROA$	0.0109	0.0211	−0.0949	0.0722
$turnover$	1.542	1.362	0.153	7.357
$size$	3.795	1.189	1.613	7.415
$lev$	0.400	0.181	0.0659	0.846
$current-ratio$	2.447	2.063	0.499	12.81
$asset-turnover$	0.162	0.0904	0.0221	0.528
$income-g$	0.0877	0.440	−0.739	2.161
$top1$	0.318	0.135	0.0888	0.684
$Tobi{n}^{\prime }sQ\left(SOEs\right)$	1.927	1.428	0.840	9.507
$Tobi{n}^{\prime }sQ(non-SOEs)$	2.160	1.422	0.840	9.507
$Tobi{n}^{\prime }sQ\left(East\right)$	2.083	1.345	0.840	9.507
$Tobi{n}^{\prime }sQ(Mid-west)$	2.162	1.615	0.840	9.507

. It can be seen that the average value of $Tobi{n}^{\prime }sQ$ for Chinese manufacturing listed companies during the sample period is 2.105, the maximum is 9.507, the minimum is 0.840, and the standard deviation is 1.427. This indicates that there are significant differences in the enterprise value of different companies during the sample period. For other variables, the descriptive statistics of profitability ($ROA$), firm size ($size$), leverage ratio ($lev$) and so on are similar to those of related studies and are within reasonable limits.

4. Results

4.1. DID Method Analysis

4.1.1. Parallel Trend Test

A key necessity when applying the DID method is that the experimental and control groups have parallel trends before policy implementation, i.e., the changing trend of the average $Tobi{n}^{\prime }sQ$ of the experimental and control groups is consistent before the carbon neutrality commitment. Otherwise, the estimation findings would be biased. As a consequence, in order to apply the DID approach efficiently, this study compares the trend of enterprise value change between these two groups, and the findings are displayed in Figure 1.

As shown in Figure 1, the dividing line is drawn in the third quarter of 2020, the time when the carbon neutrality commitment was put forward. The image on the left side of the dotted line demonstrates that before the carbon neutrality commitment, the value of the new energy companies and the non-new energy companies showed a steady upward trend, and the trends were essentially the same. The results show that the sample mostly followed a parallel trend before the carbon neutrality commitment. This study also finds that the experimental group’s value increased in the first period after the carbon neutrality commitment was made, while the control group’s value decreased, and the value of new energy companies generally increased after the carbon neutrality commitment, eventually surpassing that of non-new energy companies in the fourth period (i.e., the third quarter of 2021). This demonstrates that the carbon neutrality commitment can increase the value of the firms in the experimental group.

Additionally, this study employs the event study approach to examine the parallel trend hypothesis. Specifically, drawing on the study by Zhang et al. [31], the quarter prior to the carbon neutrality commitment, i.e., the second quarter of 2020, is considered as the reference year and removed. Then, the interaction terms of the quarter-dummy variable and group-dummy variable are generated to test the dynamic effect. The results of the parallel trend hypothesis tests are shown in Figure 2.

The results in Figure 2 show that the coefficients of the interaction terms were insignificant before the third quarter of 2020, when the carbon neutrality commitment was put forward. However, after this date, these coefficients were significantly positive. This again reveals that before the carbon neutrality commitment, there existed no obvious differences in the value between these two groups. Therefore, the study can infer that the parallel trend hypothesis is satisfied, and thus the differences between these two groups after the carbon neutrality commitment can be considered the policy effect.

4.1.2. Baseline Results

After confirming the parallel trend hypothesis, this study is able to test the impact of the carbon neutrality commitment on the value of new energy companies.

Table 3. The impacts of the carbon neutrality commitment on the new energy companies’ value: baseline regression.

Variable	(1) ${\mathit{Tobin}}^{\prime }\mathit{sQ}$	(2) ${\mathit{Tobin}}^{\prime }\mathit{sQ}$
$did$	0.401 ***	0.407 ***
	(4.08)	(4.18)
$size$		−0.461 ***
		(−4.17)
$lev$		−0.486 *
		(−1.88)
$current-ratio$		−0.040 ***
		(−2.86)
$asset-turnover$		1.634 ***
		(6.64)
$income-g$		−0.104 ***
		(−6.49)
$top1$		−1.497 ***
		(−3.23)
$Constant$	1.936 ***	4.153 ***
	(115.15)	(9.57)
Firm fixed	YES	YES
Quarter fixed	YES	YES
$R^2$	0.076	0.105

¹ Standard errors are shown in parentheses. * and *** denote significance at the 10% and 1% levels, respectively. ² Column (1) reports the estimation results without control variables. Column (2) exhibits the regression results with all control variables added.

shows the basic regression findings based on Equation (1). Column (1) of Table 3 reports the estimation results of Equation (1) without control variables. Column (2) of Table 3 exhibits the regression results of Equation (1) with all control variables added. In both regressions, a Two-Way Fixed Effects model based on individual and time was employed.

As is reported in Table 3, the carbon neutrality commitment can improve the value of the new energy companies. Specifically, the coefficients of $did$ in both columns are positive at a 1% significance level, with values of 0.401 and 0.407, respectively, suggesting that the carbon neutrality commitment has a significant and positive impact via the improvement in the new energy companies’ value, which validates the above Hypothesis 1. The carbon neutrality commitment has a positive effect on the sustainable growth of new energy companies. The main reason is that the government has sent a signal to investors, in part, by making the carbon neutrality commitment, that the new energy industry has the potential to generate greater capital accumulation and profits as a result of policy support. Some investors will consider new energy companies to have a high value of the investment, resulting in a large amount of capital being invested in new energy companies, lowering the cost of capital for new energy enterprises and thus enhancing growth.

4.2. Mediating Effect Analysis

According to the theoretical analysis, this study can conduct an empirical analysis via the mediating effect model. In

Table 4. The transmission mechanism.

Variable	(1) ${\mathit{Tobin}}^{\prime }\mathit{sQ}$	Panel A		Panel B
		(2) $\mathit{ROA}$	(3) ${\mathit{Tobin}}^{\prime }\mathit{sQ}$	(4) $\mathit{turnover}$	(5) ${\mathit{Tobin}}^{\prime }\mathit{sQ}$
$did$	0.407 ***	0.004 ***	0.395 ***	0.702 ***	0.365 ***
	(4.18)	(3.09)	(4.12)	(6.63)	(3.75)
$ROA$			3.535 ***
			(7.83)
$turnover$					0.061 ***
					(7.79)
$size$	−0.461 ***	0.011 ***	−0.501 ***	−0.355 ***	−0.440 ***
	(−4.17)	(10.52)	(−4.56)	(−4.31)	(−3.95)
$lev$	−0.486 *	−0.057 ***	−0.285	−0.021	−0.485 *
	(−1.88)	(−16.78)	(−1.08)	(−0.10)	(−1.88)
$current-ratio$	−0.040 ***	−0.001 ***	−0.038 ***	0.038 **	−0.042 ***
	(−2.86)	(−3.43)	(−2.74)	(2.54)	(−3.04)
$asset-turnover$	1.634 ***	0.140 ***	1.140 ***	2.222 ***	1.499 ***
	(6.64)	(27.84)	(4.75)	(8.04)	(6.12)
$income-g$	−0.104 ***	0.003 ***	−0.113 ***	−0.107 ***	−0.097 ***
	(−6.49)	(6.99)	(−7.02)	(−5.40)	(−6.08)
$top1$	−1.497 ***	0.007	−1.521 ***	0.451	−1.524 ***
	(−3.23)	(1.50)	(−3.30)	(1.25)	(−3.27)
$Constant$	4.153 ***	−0.029 ***	4.254 ***	2.506 ***	4.001 ***
	(9.57)	(−6.79)	(9.87)	(7.68)	(9.13)
Firm fixed	YES	YES	YES	YES	YES
Quarter fixed	YES	YES	YES	YES	YES
$R^2$	0.105	0.231	0.110	0.078	0.113

¹ Standard errors are shown in parentheses. *, ** and *** denote significance at the 10%, 5% and 1% levels, respectively.

, we report the results of the transmission mechanism between the carbon neutrality commitment and new energy companies’ value.

As shown in Table 4, the coefficient of $did$ is considerably positive at the 1% significance level in column (2), demonstrating that the carbon neutrality commitment improves the profitability of new energy firms. The coefficient of $ROA$ in column (3) is significantly positive at the 1% significance level and smaller than ${\beta }_1$. According to the above findings, this study can conclude that the carbon neutrality commitment can affect the value of new energy companies via their profitability, which supports Hypothesis 2a. The results reflect that improving the profitability of enterprises is an important guarantee for practising their sustainable development, confirming that the carbon neutrality commitment can strongly promote the unification of the real economy and environmental performance, and providing evidence for the operational logic of the high-quality development of new energy enterprises in the process of low-carbon transition.

Similarly, the results in columns (4) and (5) in Table 4 demonstrate that the carbon neutrality commitment significantly boosts investors’ willingness to invest in new energy companies and further improves the value of new energy companies, which supports Hypothesis 2b. On the one hand, this shows that investors’ recognition and approval can contribute to the sustainable development of enterprises. On the other hand, it also shows that investors in the Chinese capital market attach importance to corporate social responsibility under the carbon neutrality commitment.

4.3. Heterogeneity Analysis

The above analysis has confirmed the positive impact of the carbon neutrality commitment on new energy companies’ value as a whole, but has ignored the heterogeneity among different types of enterprises.

4.3.1. Heterogeneous Impact of the Policies on New Energy Companies with Different Ownership Structures

Based on the classification in the CSMAR database, the sample was divided into SOEs and non-SOEs, and then regression analysis was conducted for each sub-sample, as shown in Panel A of

Table 5. Heterogeneity analysis.

Variable	Panel A		Panel B
	SOEs	Non-SOEs	East	Mid-Wast
$did$	0.270	0.430 ***	0.421 ***	0.366 **
	(1.23)	(4.01)	(3.54)	(2.19)
$size$	−1.013 ***	-0.318 ***	−0.287 **	−0.913 ***
	(−3.92)	(−2.89)	(−2.49)	(−3.94)
$lev$	0.725	−0.870 ***	−0.484	−0.474
	(1.07)	(−3.66)	(−1.58)	(−0.98)
$current-ratio$	−0.065	−0.036 ***	−0.032 **	−0.063 **
	(−1.33)	(−2.58)	(−2.04)	(−2.25)
$asset-turnover$	1.160 ***	1.893 ***	1.763 ***	1.167 **
	(2.81)	(6.55)	(6.36)	(2.43)
$income-g$	−0.087 ***	−0.111 ***	−0.137 ***	−0.038
	(−3.24)	(−5.86)	(−7.93)	(−1.25)
$top1$	−0.891	−1.486 ***	−1.378 ***	−1.254
	(−0.83)	(−2.88)	(−2.72)	(−1.40)
$Constant$	6.229 ***	3.646 ***	3.384 ***	6.085 ***
	(6.77)	(7.77)	(8.10)	(6.27)
Firm fixed	YES	YES	YES	YES
Quarter fixed	YES	YES	YES	YES
$R^2$	0.117	0.117	0.100	0.134

¹ Standard errors are shown in parentheses. ** and *** denote significance at the 5% and 1% levels, respectively.

.

As indicated in Panel A of Table 5, the regression coefficient of $did$ on non-SOEs’ value is 0.430 at the 1% significance level, which shows that the carbon neutrality commitment has significantly improved the value of non-state-owned new energy companies. In contrast, for state-owned new energy enterprises, the carbon neutrality commitment does not have a significant impact via an improvement in their value, which supports Hypothesis 3a. This may be due to the fact that SOEs and non-SOEs do not share the same goals, which in turn inevitably leads to different corporate behaviors. SOEs have goals that move beyond mere commercial interests and undertake the mission of securing some form of social welfare. Non-SOEs, on the other hand, pursue economic interests to a large extent, which requires them to keep pace with policies. As a result, non-SOEs are more sensitive to policy than SOEs and are more significantly affected by carbon neutrality commitments.

4.3.2. Heterogeneous Impact of the Policies on New Energy Companies in Different Regions

According to the provinces of the enterprises in the CSMAR database, the sample enterprises are divided into two subsamples, namely eastern, central and western regions, and then regression analysis is conducted for each sub-sample, as shown in Panel B of Table 5. The coefficients of $did$ shown in columns (3) and (4) are significantly positive, indicating that the carbon neutrality commitment has a positive impact on new energy companies’ value in both the eastern and the central and western regions. Compared with new energy enterprises in the central and western regions, the positive relationship between the carbon neutrality commitment and new energy companies’ value is more significant in eastern regions (0.421 > 0.366), suggesting that the carbon neutrality commitment has a more obvious value-enhancing effect on the enterprises in the eastern than in the central and western regions, which supports Hypothesis 3b. The reason may be that, compared to the eastern region, the central and western regions have weaker advantages in production factors such as talent, technology and financing, and they therefore develop at a slower pace. Although the carbon neutrality commitment has simultaneously brought incentives to new energy companies across the country, the effect may not be as pronounced in the central and western regions as in the eastern regions at the same time.

5. Robustness Tests

5.1. The Placebo Test

This study conducts a placebo test to alleviate the issues of omitted variables, following the approach used by Li et al. [54]. Specifically, a list of new energy firms is randomly produced from Stata, namely error variable $treat1$, and then the coefficient of error variable $did1$ is obtained from the benchmark model using regression. The above operation is repeated 500 times. The distribution of the estimated coefficients of the company value measured by $Tobi{n}^{\prime }sQ$ is shown in Figure 3. After the randomization process, the estimated coefficients are concentrated around 0 and follow a normal distribution, and the unobservable attributes have no effect on the estimation value, demonstrating that the initial estimation results are robust.

5.2. Alternative Measures of $Tobi{n}^{\prime }sQ$

Variable measurement bias may interfere with the findings. In the baseline regression, $Tobi{n}^{\prime }sQ$ is the dependent variable. However, because of the impact of intangible assets and goodwill on the measurement of $Tobi{n}^{\prime }sQ$, the denominator is adjusted to “total assets–net intangible assets–net goodwill” [55], and it is defined as the variable $Tobi{n}^{\prime }sQ1$ as a replacement explanatory variable for robustness testing. The estimation results are reported in

Table 6. Robustness test II: Alternative measures of $Tobi{n}^{\prime }sQ$.

Variable	(1) ${\mathit{Tobin}}^{\prime }\mathit{sQ}1$
$did$	0.452 ***
	(4.33)
$size$	−0.407 ***
	(−3.56)
$lev$	−0.809 ***
	(−2.99)
$current-ratio$	−0.067 ***
	(−4.46)
$asset-turnover$	1.717 ***
	(6.58)
$income-g$	−0.113 ***
	(−6.72)
$top1$	−1.500 ***
	(−3.06)
$Constant$	4.324 ***
	(9.49)
Firm fixed	YES
Quarter fixed	YES
$R^2$	0.097

¹ Standard errors are shown in parentheses. *** denote significance at the 1% levels.

.

As is reported in Table 6, the coefficients of $did$ are positive at a 1% significance level, with values of 0.447 and 0.452, respectively. Due to this, the conclusion that the carbon neutrality commitment can improve the value of the new energy companies is reliable and robust.

5.3. Robustness Test Based on Propensity Score Matching and Difference-in-Difference (PSM-DID) Method

In order to address the problem of sample selection bias caused by possible systematic disparities between new energy companies and non-new-energy companies, this study uses the PSM-DID method for robustness testing. This study employs nearest neighbor matching to match the proper control group for the experimental group, and the variables do not differ significantly after matching, which supports the adoption of the PSM-DID approach and satisfies the common support hypothesis. As can be seen from

Table 7. Robustness test III: PSM-DID.

Variable	(1) ${\mathit{Tobin}}^{\prime }\mathit{sQ}$
$did$	0.412 ***
	(4.21)
$size$	−0.418 ***
	(−3.73)
$lev$	−0.496 *
	(−1.88)
$current-ratio$	−0.039 **
	(−2.46)
$asset-turnover$	1.689 ***
	(6.80)
$income-g$	−0.107 ***
	(−6.56)
$top1$	−1.619 ***
	(−3.52)
$Constant$	4.018 ***
	(8.99)
Firm fixed	YES
Quarter fixed	YES
$R^2$	0.103

¹ Standard errors are shown in parentheses. *, ** and *** denote significance at the 10%, 5% and 1% levels, respectively.

, the conclusions of this study are still supported after testing by the PSM-DID method.

5.4. Excluding the Effect of Other Policies during the Same Period

Another concern regarding accurately evaluating the value-enhancing effect of the carbon neutrality commitment on new energy companies is the impact that other policies may have on our estimates during the same period. Wind power and photovoltaic firms account for 22% of new energy enterprises in our sample, whereas new energy vehicles account for 77%. Therefore, the estimation results of this study are potentially more likely to be influenced by these two policies, i.e., ”exemption of vehicle acquisition tax on new-energy automobiles” and “subsidy-free grid parity for wind power and photovoltaic power generation in 2020”. Drawing on Cui et al. [56], we construct interaction terms for the policy and time variables and add the interaction terms to Equation (1) separately to verify the impact of these two policies on our estimation results.

5.4.1. Relevant Policies for the Exemption of Vehicle Acquisition Tax on New Energy Automobiles

Exemption of acquisition tax is one of the preferential policies for new energy vehicles, which has greatly promoted the development of new energy vehicle enterprises. The policy of exempting new energy automobiles from the acquisition tax was first implemented in 2014 and has been extended several times since then. On 16 April 2020, the Chinese government determined that the policy of exempting new energy vehicles from the acquisition tax would be extended until 31 December 2022. The acquisition subsidy can act on the business performance of new energy vehicle enterprises through factors such as market demand for new energy vehicles and enterprise costs, which in turn can promote the improvement of enterprise value. Firstly, the exemption of vehicle acquisition tax can reduce the cost of purchasing new energy vehicles for consumers and boost the market demand for new energy vehicles. Secondly, the improvement in market demand can promote consumers to recognize the market development trend, explore potential consumer demand and create positive market orientation. Market orientation can share the cost of innovation and research and development of enterprises, which affects the business performance of enterprises and thus the value of new energy vehicle enterprises.

This policy, i.e., relevant policies for the exemption of vehicle acquisition tax on new energy automobiles, was issued at a similar time as the announcement of the carbon neutrality commitment considered in this study. Therefore, we should control the impact of the preferential policy of exempting new energy vehicles from acquisition tax. Specifically, we use the new energy vehicle enterprises in the sample as the experimental group and the other enterprises as the control group. We use a dummy variable $treat1$, which is 1 if it is a new energy vehicle firm and 0 otherwise. Then, we also need to create a new time dummy variable $post1$, which is $post1$ = 1 after the release of this policy (2020q2) and 0 otherwise. Finally, we construct $did1$ ($did1=treat1\times post1$) and add this interaction term to Equation (1) for regression analysis. The results are shown in columns (1) and (2) of

Table 8. Robustness test IV: Excluding the effect of other policies during the same period.

Variable	(1) ${\mathit{Tobin}}^{\prime }\mathit{sQ}$	(2) ${\mathit{Tobin}}^{\prime }\mathit{sQ}$
$did$	0.349 ***	0.456 ***
	(3.76)	(4.31)
$did1$	0.105
	(0.95)
$did2$		−0.257
		(−1.18)
$size$	−0.462 ***	−0.462 ***
	(−4.18)	(−4.18)
$lev$	−0.483 *	−0.483 *
	(−1.87)	(−1.87)
$current-ratio$	−0.040 ***	−0.040 ***
	(−2.87)	(−2.85)
$asset-turnover$	1.634 ***	1.633 ***
	(6.64)	(6.64)
$income-g$	−0.104 ***	−0.104 ***
	(−6.50)	(−6.52)
$top1$	−1.500 ***	−1.504 ***
	(−3.24)	(−3.25)
$Constant$	4.154 ***	4.157 ***
	(9.58)	(9.58)
Firm fixed	YES	YES
Quarter fixed	YES	YES
$R^2$	0.105	0.105

¹ Standard errors are shown in parentheses. * and *** denote significance at the 10% and 1% levels, respectively.

. The results show that the coefficients of $did1$ are not significant with or without the inclusion of the control variables, which indicates that the exemption from the acquisition tax on new energy vehicles does not have different effects on the experimental and control groups. The coefficients of $did$ are still significantly positive, which indicates that our estimation results are not affected by the policy of exemption from the acquisition tax on new energy vehicles.

5.4.2. Subsidy-Free Grid Parity for Wind Power and Photovoltaic Power Generation in 2020

Grid parity projects are wind power and photovoltaic power generation projects that do not require state subsidies to implement the same feed-in tariff as coal-fired power. Although the government no longer subsidizes the pilot projects, there are incentive policies. By supporting policies to encourage enterprises to implement parity grid pilot projects, it is possible to increase the scale of installed renewable energy and power generation and enhance the proportion of non-fossil energy in total primary energy consumption. This can also promote enterprises to accelerate innovation and effectively improve the market competitiveness of wind power and photovoltaic power generation enterprises. Subsidy-free grid parity for wind power and photovoltaic power generation in 2020 was released at the same time point as the policies considered in this study, both in the third quarter of 2020, and thus may have an impact on the estimation results of this study. Therefore, we should control for the impact of the policy of parity projects. The specific validation method is the same as above. We use firms in the wind and solar sectors as the experimental group and other firms as the control group, denoted by the variable $treat2$ = 1 if wind power firms or photovoltaic firms, and 0 otherwise. We then create a new time dummy variable $post2$, i.e., after the release of this policy (2020q3), $post2$ = 1, and 0 otherwise. Finally, we construct $did2$ ($did2=treat2\times post2$) and add this interaction term to Equation (1) for regression analysis. The results are shown in columns (3) and (4) of Table 8. The results show that the coefficients of $did2$ are not significant with or without the inclusion of control variables, which indicates that the grid parity projects do not differentially affect the experimental and control groups. The coefficients of $did$ remain significantly positive, which indicates that our estimation results are not affected by the grid parity projects for wind power and photovoltaic power generation in 2020.

6. Conclusions and Policy Implications

6.1. Conclusions

New energy plays an important role in achieving carbon neutrality. Based on quarterly panel data of 2101 Chinese A-share listed manufacturing companies from January 2019 to March 2022, this study applies the DID method to empirically test the impact of the carbon neutrality commitment on the sustainable development of new energy companies. The main conclusions are as follows.

First, China’s carbon neutrality commitment significantly improves the enterprise value of the new energy industry, and consequently contributes to the sustainable development of the companies. Thus far, the impact of carbon neutrality commitment on new energy enterprises has not been investigated. This paper conducts an empirical study with a sample of Chinese companies to confirm the positive impact of the carbon neutrality commitment on the sustainable growth of new energy companies.

Second, the profitability and investor sentiment are important mediating variables of the carbon neutrality commitment, influencing the sustainable growth of new energy enterprises. In China, investors will follow national policies to determine whether an industry or enterprise has investment value. As a strategic emerging industry, new energy needs more financial support for its development. Under the carbon neutrality commitment, investors will favor new energy companies, which will lead to more capital tilting toward the new energy industry. New energy enterprises can use these funds to develop technology and expand their business to achieve sustainable growth. In addition, under the constraint of carbon emission reduction, the demand for new energy products will increase, so that the revenue of new energy enterprises will also rise. For enterprises, profitability is the basis of their sustainable development. Therefore, overall, carbon neutrality commitment contributes to the sustainable development of new energy companies via investor sentiment and profitability.

Third, under the background of carbon neutrality, the value of non-state-owned new energy enterprises has been significantly improved, while the improvement effect of SOEs is less obvious. In addition, the impact of the carbon neutrality commitment on enterprise value improvement in the eastern region is more prominent than that in the central and western regions.

6.2. Policy Implications

Based on the above conclusions, this study puts forward the following policy implications.

First of all, for the government, it is advised to ensure the supply of the new energy industry, as well as providing government subsidies and financial support. Under the carbon neutrality commitment, new energy, which includes hydro, wind, solar, biomass and other types of renewable energy, is the main force of low-carbon energy development, and new energy enterprises will become an indispensable guideline for future high-quality economic development. If new energy enterprises benefit from the government’s policy support, they will be able to improve their own profitability and enterprise value, as well as achieve sustainable development, which in turn will continue to contribute to a reduction in carbon emissions. Furthermore, different preferential policies should be implemented for enterprises with different equity nature and regions. Non-state enterprises still account for a large share of new energy enterprises, and the government should continue to stimulate them through financial subsidies and tax rates to ensure their long-term and steady development. As for SOEs, the government should begin by improving their efficiency and attitude toward fair and equitable participation in market competition, and strengthening R&D and operational efficiency in order to achieve a significant increase in company value. Compared with the eastern region, the industrial development environment in the central and western regions is regressive, and under such conditions, the cultivation and development of new energy enterprises is also more difficult. Therefore, the government must provide more government subsidies and financial support to the central and western regions. In addition, there is also an important point, that is, we need to pay attention to the intensity of policy implementation. According to studies, if the government wrongly over-subsidizes, it will not only hinder the development of firms but may also lead to enterprise “cartilage”, which is not favorable to the healthy development of enterprises [57]. Therefore, we should make dynamic adjustments to the implementation of the policy.

Secondly, new energy enterprises should fully utilize the positive effect brought about by national policy to improve operational enthusiasm. While focusing on the main business, it is also particularly important for new energy enterprises to improve the level of R&D and innovation. In these ways, they can gain a competitive advantage in the market and maintain a steady increase in enterprise value, so as to better and more quickly adapt to the needs of the new situation of high-quality development, and achieve a “win–win” situation for both enterprises.

Finally, investors should take the policy direction seriously and look for investment possibilities. There is no doubt that carbon neutrality has become a global political consensus. In this context, the value of new energy enterprises is improved, and a high enterprise value generally indicates that the company has more growth potential, profitability and investment opportunities, as well as higher development potential and prospects. As a result, investors may take advantage of the potential to increase their wealth while simultaneously contributing to the growth of the new energy industry and the achievement of carbon neutrality.