Climate Policy Uncertainty and Product Market Performance

ABSTRACT

Using annual data from 276 listed Chinese energy companies from 2009 to 2022, this study investigates the impact of climate policy uncertainty (CPU) on energy companies' product market performance (PMP). The results indicate that CPU significantly enhances enterprise performance in the product market, and subsequent analyses involving variable substitution, tail reduction, and the consideration of potential endogeneity issues confirm the robustness of this conclusion. Additionally, the moderating effects results indicate that among the four types of cross‐border capital flows, cross‐border capital direct investment and cross‐border capital flows from other investments negatively moderate the CPU–PMP relationship, while the overall level of cross‐border capital flows positively moderates the CPU–PMP relationship. Meanwhile, ESG performance and actions with R&D backgrounds positively moderate the CPU–PMP relationship. Moreover, the mediating effect test reveals that CPU influences energy companies' PMP primarily through enhancing technological innovation, alleviating financing constraints, improving the management incentive system, and reducing equity concentration. Lastly, heterogeneity results demonstrate that CPU has a more significant influence on the market performance of non‐SOEs, large‐scale enterprises, profitable companies, non‐transparent companies, enterprises characterized by dispersed equity ownership, and regions with higher stabilization policy efficiency.