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α: calibrated so average coauthorship-adjusted count equals average raw count
The pilot carbon market is a vital policy tool in China's pursuit of its carbon peak and neutrality goals. Different trading mechanisms within these pilot markets create varying economic incentives in carbon trading, leading to differentiated impacts on corporate financial performance. This study analyzes the effects of carbon market trading mechanisms on firm performance by examining trading regulations in pilot carbon markets. Our findings reveal that regulated enterprises exhibit significantly better average economic performance than unregulated enterprises following the implementation of carbon market pilots. We also identify that total volume determination, initial quota allocation mechanisms, and quota offset mechanisms significantly influence corporate performance. Specifically, carbon emissions trading enhances enterprise economic performance more effectively when pilot carbon markets adopt predetermined total allowances, conduct allowance auctions, or allow for a higher proportion of allowance offsets.