Abstract
There is no conclusion on whether green development can symbiotically coexist with shared development, and the effect of environmental protection tax on labor share provides new evidence to answer this question. This paper presents a theoretical analysis of change in labor share in the exogenous impact of the enforcement of the Environmental Protection Tax Law of China, and proposes relevant hypotheses. At the same time, empirical data of listed firms on the main board from 2013 to 2019 are collected. A difference-in-differences model is constructed to test the hypotheses empirically. The study found that the reform of environmental protection fee to tax reduced the labor share of high-polluting firms by an average of about 1.43%. However, it did not significantly reduce the share of corporate executives’ income. The reform of environmental protection fee to tax reduces the labor share of high-polluting firms through the crowding-out effect and the substitution effect of production technology. The heterogeneity study revealed that the reform of environmental protection fee to tax has more substantial negative impacts on firms with high financing constraints, low market concerns, and low government subsidies. There is no significant difference between the impact on state-owned and private firms. The reform of environmental protection fee to tax has a more substantial negative impact on the firms in Central and Western China than those in more economically developed Eastern China.
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The data presented in this study are available upon request from the first author.
Notes
OECD (2022), “Aggregate National Accounts, SNA 2008 (or SNA 1993): gross domestic product,” OECD National Accounts Statistics (database), https://doi.org/10.1787/data-00001-en.
The identification of high-polluting enterprises is mainly based on the Ministry of Environmental Protection’s 2008 “List of Listed Companies for Environmental Verification Industry Classification and Management” (Environmental Protection Office Letter 2008] No. 373) and the “Guidance on Environmental Information Disclosure for Listed Companies” (Environmental Protection Office Letter [2010] No. 78), which mainly includes 16 categories of industries including thermal power, iron and steel, cement, electrolytic aluminum, coal, metallurgy, chemical, petrochemical, building materials, paper, brewing, pharmaceutical, fermentation, textile, tannery, and mining.
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This research was supported by the Scientific Research Fund of Hunan Provincial Education Department (Grant No. 20BJY039).
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Qian Xiao: writing—original draft, investigation, and methodology; Yaohui Jiang: writing—original draft, data curation and analysis, and validation; Rong Li: writing—reviewing and supervision; Sidi Xiao: writing—reviewing and editing.
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Xiao, Q., Jiang, Y., Li, R. et al. Environmental protection tax and the labor income share of companies: evidence from a quasi-natural experiment in China. Environ Sci Pollut Res 30, 41820–41833 (2023). https://doi.org/10.1007/s11356-023-25239-7
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DOI: https://doi.org/10.1007/s11356-023-25239-7