Abstract: Clean development mechanism (CDM) is currently the most essential mechanism that enables international cooperation in emissions reduction. The rapid growth of CDM projects earlier in China relied on policy support other than enterprises' motivation, resulting in a sharp decline in CDM participation at the expiration of Kyoto protocol. Actually, CDM's contribution is not confined to environmental modification or emissions trading revenue. A large portion of its real value, such as promoting overseas business and saving production cost, has long been neglected. Thus, the purpose of this research is to reveal and verify the potential value of CDM to encourage more domestic enterprises to participate in it. Using a sample of domestic companies engaged in CDM from 2006 to 2015, the specific impacts of CDM projects on corporate's export revenues and production cost ratio are explored. In testifying the influence of CDM projects on corporate's export proportion, an OLS regression model is primarily used to identify a significant increase in export proportion after 2012, a big year for CDM. A control group of corporates not engaged in CDM is later included for DID analysis of which the result suggests that the increase in export proportion for the treatment group is significantly larger than that of the control group. Inconsistent with our former assumption, reduction of production cost ratio at the operation of a CDM project is only witnessed in several particular industries. Further analysis suggests that the specific traits of such industries include higher profitability, better liquidity and lower leverage. Moreover, companies from those industries tend to develop mainstream types of CDM projects. Given above empirical evidence, it is concluded that the promotion of export proportion is valid for all companies involved in CDM while the reduction in production cost ratio only works for specific industries. This study has enriched research about CDM's influences on enterprises' operating performances, which provides clear guidance for corporate managers to make CDM-related decisions and for governments to formulate supporting policies.

Key words: CDM, export proportion, production cost ratio