Earnings Pressure and Corporate Carbon Productivity: Evidence from Chinese Listed Industrial Firms

Abstract

Using 14,663 firm-year observations from 2911 Chinese listed industrial firms over 2010–2022, we examine the association between earnings pressure and corporate carbon productivity. Earnings pressure is identified from firms’ proximity to analysts’ earnings-forecast thresholds, and carbon productivity is measured as main business revenue generated per unit of estimated carbon emissions. Firms near the forecast thresholds have significantly lower carbon productivity: the baseline coefficients imply differences of approximately 1.34% and 0.95% under the mean- and median-forecast definitions. The coefficients remain negative and statistically significant when firm and year fixed effects are included and standard errors are clustered by firm. The relationship also varies with abnormal discretionary-expense behavior, severe environmental risk-management failures, and general innovation input, and it is weaker among firms receiving greater analyst attention and among firms located in the Yangtze River Economic Belt. These findings extend evidence on the environmental consequences of short-term capital-market pressure to carbon-related economic efficiency.