The 'Dark Side' of carbon peak pressure---based on real earning management of Chinese heavily polluting firms
COP 28 highlights the challenges associated with achieving a timely global consensus on carbon reduction measures within the framework of the Paris Agreement. As the deadline for promises nears, the increased pressure on China, a principal supporter of carbon emissions reductions, has raised fears...
| Main Authors: | , , , |
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| Format: | Article |
| Language: | English |
| Published: |
Spinger Nature
2025
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| Online Access: | http://psasir.upm.edu.my/id/eprint/119676/ http://psasir.upm.edu.my/id/eprint/119676/1/119676.pdf |
| _version_ | 1848868035325067264 |
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| author | Chu, Yichun Abdul Rahim, Norhuda Soh, Wei Ni Haji Yahya, Mohamed Hisham |
| author_facet | Chu, Yichun Abdul Rahim, Norhuda Soh, Wei Ni Haji Yahya, Mohamed Hisham |
| author_sort | Chu, Yichun |
| building | UPM Institutional Repository |
| collection | Online Access |
| description | COP 28 highlights the challenges associated with achieving a timely global consensus on carbon reduction measures within the framework of the Paris Agreement. As the deadline
for promises nears, the increased pressure on China, a principal supporter of carbon emissions reductions, has raised fears about possible negative repercussions. This study investigates the impact of regional peak carbon pressures on firms' real earnings management by using a multiple linear regression approach with the sample of heavy polluters listed on China's A-share from 2015 to 2021. The findings suggest that higher regional peak carbon pressures lead to greater earnings management behaviour in heavy polluting enterprises as they face larger operational limits and higher costs for environmental investment and
green transitions. These issues limit financial flexibility and total factor productivity, motivating earnings manipulation, which is more pronounced in non-state-owned enterprises
and those with fewer environmental responsibilities. These findings highlight the unintended consequences of carbon policies on corporate behavior, exposing the requirement
for governments to reassess environmental regulations to balance corporate sustainability with environmental protection goals |
| first_indexed | 2025-11-15T14:45:59Z |
| format | Article |
| id | upm-119676 |
| institution | Universiti Putra Malaysia |
| institution_category | Local University |
| language | English |
| last_indexed | 2025-11-15T14:45:59Z |
| publishDate | 2025 |
| publisher | Spinger Nature |
| recordtype | eprints |
| repository_type | Digital Repository |
| spelling | upm-1196762025-09-08T00:57:28Z http://psasir.upm.edu.my/id/eprint/119676/ The 'Dark Side' of carbon peak pressure---based on real earning management of Chinese heavily polluting firms Chu, Yichun Abdul Rahim, Norhuda Soh, Wei Ni Haji Yahya, Mohamed Hisham COP 28 highlights the challenges associated with achieving a timely global consensus on carbon reduction measures within the framework of the Paris Agreement. As the deadline for promises nears, the increased pressure on China, a principal supporter of carbon emissions reductions, has raised fears about possible negative repercussions. This study investigates the impact of regional peak carbon pressures on firms' real earnings management by using a multiple linear regression approach with the sample of heavy polluters listed on China's A-share from 2015 to 2021. The findings suggest that higher regional peak carbon pressures lead to greater earnings management behaviour in heavy polluting enterprises as they face larger operational limits and higher costs for environmental investment and green transitions. These issues limit financial flexibility and total factor productivity, motivating earnings manipulation, which is more pronounced in non-state-owned enterprises and those with fewer environmental responsibilities. These findings highlight the unintended consequences of carbon policies on corporate behavior, exposing the requirement for governments to reassess environmental regulations to balance corporate sustainability with environmental protection goals Spinger Nature 2025 Article PeerReviewed text en http://psasir.upm.edu.my/id/eprint/119676/1/119676.pdf Chu, Yichun and Abdul Rahim, Norhuda and Soh, Wei Ni and Haji Yahya, Mohamed Hisham (2025) The 'Dark Side' of carbon peak pressure---based on real earning management of Chinese heavily polluting firms. Environment, Development and Sustainability. pp. 1-24. ISSN 1387-585X; eISSN: 1573-2975 (In Press) https://link.springer.com/article/10.1007/s10668-025-06486-9 10.1007/s10668-025-06486-9 |
| spellingShingle | Chu, Yichun Abdul Rahim, Norhuda Soh, Wei Ni Haji Yahya, Mohamed Hisham The 'Dark Side' of carbon peak pressure---based on real earning management of Chinese heavily polluting firms |
| title | The 'Dark Side' of carbon peak pressure---based on real earning management of Chinese heavily polluting firms |
| title_full | The 'Dark Side' of carbon peak pressure---based on real earning management of Chinese heavily polluting firms |
| title_fullStr | The 'Dark Side' of carbon peak pressure---based on real earning management of Chinese heavily polluting firms |
| title_full_unstemmed | The 'Dark Side' of carbon peak pressure---based on real earning management of Chinese heavily polluting firms |
| title_short | The 'Dark Side' of carbon peak pressure---based on real earning management of Chinese heavily polluting firms |
| title_sort | 'dark side' of carbon peak pressure---based on real earning management of chinese heavily polluting firms |
| url | http://psasir.upm.edu.my/id/eprint/119676/ http://psasir.upm.edu.my/id/eprint/119676/ http://psasir.upm.edu.my/id/eprint/119676/ http://psasir.upm.edu.my/id/eprint/119676/1/119676.pdf |