How does the Paris Agreement affect firm productivity? International evidence

Using the event study method, this study examines how the Paris Agreement affects firm pro-ductivity in the long and short term. With a sample of global listed firms from 2013 to 2020, we find that in the short term, the Paris Agreement has a negative impact effect on firms' total factor productivity (TFP). However, in the long term, it shows a positive optimization effect on firms' TFP. Furthermore, economic policy uncertainty and firms' risks mediate the effect of the Paris Agreement on firms' TFP in the short term; while green innovation mediates its effect in the long term.

Automated summary

Using event study method, this study examines the impact of the Paris Agreement on firm productivity in both the short and long term. Analysis of a sample of global listed firms from 2013 to 2020 reveals that the Paris Agreement initially has a negative effect on firms' total factor productivity (TFP) in the short term, but a positive optimization effect on TFP in the long term. Economic policy uncertainty and firms' risks mediate the agreement's short-term impact, while green innovation mediates its long-term impact.