I study how environmental regulation, or the COD reduction mandates during Chinese eleventh five-year plan (2006-2010), affects firm dynamics: entry, exit, and (aggregate) productivity. While most existing literature on environmental regulation focuses on the effects on incumbent firms...

We (re)evaluate the general-equilibrium effects of (environmental) policies from the perspectives of input-output networks and firm dynamics. Using China's carbon emission trading system (ETS) as an example, we find that ETS leads to more patent applications, especially the ones associated with...