Carbon trading thickness and market efficiency in a socialist market economy. Issue 2 (3rd April 2018)

• Record Type: Journal Article
• Authors: Wang, Qian; Wu, Sitong
• Is Part Of: Chinese journal of population resources and environment. Volume 16:Issue 2(2018)
• Page Start: 109
• Page End: 119
• Publication Date: 2018-04-03
• Subjects: Emission trade system -- efficient market hypothesis -- market efficiency; Population -- Environmental aspects -- Periodicals; Natural resources -- China -- Periodicals; Environmental protection -- China -- Periodicals; Environmental protection; Natural resources; Population -- Environmental aspects; China; Periodicals; 333.705
• DOI: 10.1080/10042857.2018.1481308
• Languages: English
• ISSNs: 1004-2857

Abstract

ABSTRACT: Unlike the European Union emission trade system (EU ETS), China's pilot ETSs implemented diversified policy designs instead of using a uniform framework. Variance ratio test is used to evaluate the Efficient Market Hypothesis (EMH) in China's carbon trading markets. The results of two versions of variance ratio tests indicate that the carbon trading market in Hubei is considered weak form efficient, and the socialist market economy does not necessarily lead to market inefficiency in carbon trading markets. Thin trading activities generate market frictions and bias the Efficient Market Hypothesis (EMH) tests.