Evaluating the effect of green fiscal policy on firm energy performance: evidence from China

The green fiscal policy stands as a potent catalyst for fostering the green and low-carbon transition, with aims to garner multifaceted social, economic, and ecological gains. However, empirical evidence elucidating the impacts of green fiscal policies on firm energy performance remains scarce. Based on a unique firm-level dataset from 2008 to 2016, this paper utilizes the staggered difference-in-differences strategy to examine the energy-saving benefits of China's energy saving and emission reduction (ESER) fiscal policy. The results indicate that the ESER fiscal policy effectively enhances firm energy performance, supported by various robustness checks. Mechanism analysis reveals that technology innovation and energy consumption restructuring are significant channels through which the ESER fiscal policy improves firm energy performance. Moreover, the ESER fiscal policy contributes more remarkably to the energy performance of large-scale firms and non-resource-based urban firms. This study highlights the essential policy insights for further optimizing green fiscal policies to facilitate the upgrading of firm energy consumption.