In an effort to aggressively combat climate change, China implemented a low-carbon city pilot policy (LCCP) in 2010. This study analyzes the impact LCCP, which is a specific environmental regulation on firms' profitability and innovation performance. The study argues that LCCP has an impact on...

Leveraging the sharp changes in environmental regulation embedded in China's 11th Five-Year Plan (FYP), which covered the period from 2006 to 2010, we characterize the degree to which the plan softens trade-offs between emissions and output. We document that the 11th FYP is associated with...