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Market Reactions to the Introduction of Voluntary Carbon Trading: Evidence From Taiwan

2026/04/20 by Shu‐Han Hsu, Wei‐Cheng Chen, Yiwen Yang · 1 voice
Business, Management and Accounting · Economics, Econometrics and Finance · #Corporate Social Responsibility Reporting #Regulation and Compliance Studies #Sustainable Finance and Green Bonds

paper · doi:10.1111/sjpe.70072

openalex publication_date 2026/04/20 · openalex created_date 2026/04/21 · openalex updated_date 2026/07/23

Abstract

ABSTRACT The literature has primarily focused on regulated and compliance‐oriented carbon markets and has rarely explored the effects of voluntary carbon‐rights trading (VCRT) across industries. The present study employs an event‐study approach to examine industry‐level stock‐return responses to Taiwan's announcement of a VCRT policy. The results reveal that market reactions are concentrated in the post‐event window and produce negative abnormal returns for carbon‐intensive and low‐tech industries, while producing positive abnormal returns for high‐tech industries. These patterns suggest that investors reassess firms' exposure to transition risks and opportunities associated with VCRT and highlight the importance of aligning corporate strategies with climate‐related policy signals.

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