Abstract
The implementation of the Environmental Tax Law is a milestone in promoting China’s green tax reform. However, the existence literature has lacked attention to whether it leads enterprises to invest in green environmental protection. To examine the Environmental Tax Law effects and mechanism on the environmental investment of heavy-polluted enterprises, this study used the data of heavy-polluted enterprises listed on the A-share market from 2012 to 2020 and regarded the Environmental Tax Law as a quasi-natural experiment to employ a difference-in-differences model. We found that environmental tax improves the green environmental investment of heavy-polluted enterprises, reflecting the guiding role of policy on enterprise investment allocation. Heterogeneity was found, and the promotion effect of environmental tax reform on enterprise environmental investment is more significant in non-nation-owned, central-western regions, and small-scale enterprises. Further analysis believed that market competition, as an external mechanism, helps strengthen environmental tax reform’s implementation effect. The findings of this paper provide a new proof for a comprehensive understanding of the micro-effect of environmental tax reform and provide a reference for the implementation of green development strategies.
Similar content being viewed by others
Data availability
The original data for this study have been provided by the authors.
References
Allcott H, Mullainathan S, Taubinsky D (2014) Energy policy with externalities and internalities. J Public Econ 112:72–88. https://doi.org/10.1016/j.jpubeco.2014.01.004
Chariri A, Ratna G, Bethary O (2018) Does green investment increase financial performance? Empirical evidence from Indonesian companies. E3S web conference. https://doi.org/10.1051/e3sconf/20183109001
Chaton C, Guillerminet M-L (2013) Competition and environmental policies in an electricity sector. Energy Econ 36:215–228. https://doi.org/10.1016/j.eneco.2012.08.014
DeFond ML, Park CW (1999) The effect of competition on CEO turnover. J Account Econ 27:35–56. https://doi.org/10.1016/S0165-4101(98)00044-5
Du W (2019) Can environmental regulation promote overcapacity governance? Microscopic evidence from Chinese industrial enterprises. J China Univ Geosci (Social Sciences Edition) 19:57–71. https://doi.org/10.16493/j.cnki.42-1627/c.2019.04.006
Gray WB (1987) The cost of regulation: OSHA, EPA and the productivity slowdown. Am Econ Rev 77:998–1006
Guo B, Feng Y, Hu F (2023a) Have carbon emission trading pilot policy improved urban innovation capacity? Evidence from a quasi-natural experiment in China. Environ Sci Pollut Res. https://doi.org/10.1007/s11356-023-25699-x
Guo B, Hu P, Zhang H et al (2023b) The improvement of energy-consuming right trading policy on the efficiency of urban green development. Front Environ Sci. https://doi.org/10.3389/fenvs.2023.1123608
Guo B, Wang Y, Zhang H et al (2023c) Impact of the digital economy on high-quality urban economic development: evidence from Chinese cities. Econ Model 120:106194. https://doi.org/10.1016/j.econmod.2023.106194
Guo B, Wang Y, Zhou H, Hu F (2022) Can environmental tax reform promote carbon abatement of resource-based cities? Evidence from a quasi-natural experiment in China. Environ Sci Pollut Res. https://doi.org/10.1007/s11356-022-23669-3
Guo J, Fang Y, Yang Y (2019) Does China’s pollution levy standards reform promote emissions reduction? J World Econ 7:74–90. https://doi.org/10.19985/j.cnki.cassjwe.2019.01.007
He CF, Zhang T, Yang SL (2013) Air pollution in Chinese cities: does enforcement of environmental regulations matter? J Nat Resour 28:1651–1663. https://doi.org/10.19985/j.cnki.cassjwe.2019.01.007
Jiang YF, Tian H (2014) Impact of corporate environmental responsibility, corporate environmental ethics on competitive advantage: the mediating effect of green innovation. J Manag 11:1191–1198. https://doi.org/10.3969/j.issn.1672-884x.2014.08.013
Jiang Z, Xu C, Zhou J (2023) Government environmental protection subsidies, environmental tax collection, and green innovation: evidence from listed enterprises in China. Environ Sci Pollut Res 30:4627–4641. https://doi.org/10.1007/s11356-022-22538-3
Kim Y, Kim SI (2022) Environmental risk and credit ratings, and the moderating effect of market competition. Int J Environ Res Public Health 19(9):5341. https://doi.org/10.3390/ijerph19095341
Liu GQ, Yang ZQ, Zhang F, Zhang N (2022) Environmental tax reform and environmental investment: a quasi-natural experiment based on China's Environmental Protection Tax Law. Energy Econ 109. https://doi.org/10.1016/j.eneco.2022.106000
Liu Y, Huang ZY, Liu XX (2021) Environmental regulation, management’s compensation incentive and corporate environmental investment—evidence form the implementation of the environmental protection law in 2015. Account Res 403:175–192. https://doi.org/10.3969/j.issn.1003-2886.2021.05.014
Lu H, Deng T, She J (2019) Can financial subsidies promote the “greening” of enterprises? Research on listed companies from heavy pollution industry in China. Bus Manag J 4:5–22. https://doi.org/10.19616/j.cnki.bmj.2019.04.001
Luken R, Van Rompaey F (2008) Drivers for and barriers to environmentally sound technology adoption by manufacturing plants in nine developing countries. J Clean Prod 16:S67–S77. https://doi.org/10.1016/j.jclepro.2007.10.006
Martin R, de Preux LB, Wagner UJ (2014) The impact of a carbon tax on manufacturing: evidence from microdata. J Public Econ 117:1–14. https://doi.org/10.1016/j.jpubeco.2014.04.016
Maxwell JW, Decker CS (2006) Voluntary environmental investment and responsive regulation. Environ Resour Econ 33:425–439. https://doi.org/10.1007/s10640-005-4992-z
Monasterolo I, Raberto M (2018) The EIRIN flow-of-funds behavioural model of green fiscal policies and green sovereign bonds. Ecol Econ 144:228–243. https://doi.org/10.1016/j.ecolecon.2017.07.029
Porter ME, van der Linde C (1995) Toward a new conception of the environment-competitiveness relationship. J Econ Perspect 9:97–118
Soest DP (2005) The impact of environmental policy instruments on the timing of adoption of energy-saving technologies. Resour Energy Econ 27:235–247. https://doi.org/10.1016/S0140-6701(06)82003-5
Suchman MC (1995) Managing legitimacy: strategic and institutional approaches. Acad Manag Rev 20:571–610. https://doi.org/10.2307/258788
Sun J, Li CG, Cheng GQ (2012) A study on company’s environmental orientation, environmental strategy and corporate performance based on the survey in two-oriented society pilot area of Wuhan city circle. J Manag 9:927–935. https://doi.org/10.3969/j.issn.1672-884X.2012.06.022
Tang G, Ni J, He R (2018) Regional economic development, corporate environment investment and corporate value: the case of listed companies in Hubei Province. Hubei Soc Sci 6:93–99. https://doi.org/10.13660/j.cnki.42-1112/c.014615
Wang P, Huang S, Yang Z et al (2022) Research on the impact of the environmental protection tax on the green total factor productivity of the enterprises. Tax Res 11:66–73. https://doi.org/10.19376/j.cnki.cn11-1011/f.2022.11.021
Wang Y, Li Y, Ma Z (2017) Media coverage, environmental regulation and corporate environmental behavior. Nankai Bus Rev 20:83–94
Wen H, Zhou F (2019) Environmental regulation and green total factor productivity in China’s provinces: evidence from the adjustment of pollution charges standard. J Arid Land Resour Environ 33:9–15. https://doi.org/10.13448/j.cnki.jalre.2019.035
Wu J, Chen Q (2014) Discussing the bonus originated from the transition of pollution discharge fees to environmental protection tax. Environ Protect 43:21–25. https://doi.org/10.14026/j.cnki.0253-9705.2015.16.003
Xie J, Tang G, Xiang Y (2016) Management ability, nature of property right and corporate tax avoidance. J Jiangxi Univ Financ Econ 2:43–59. https://doi.org/10.13676/j.cnki.cn36-1224/f.2016.02.006
Yu Z (2021) Environmental protection interview, government environmental protection subsidies and enterprise green innovation. Foreign Econ Manag 43:22–37. https://doi.org/10.16538/j.cnki.fem.20210508.201
Zhang H (2016) Strategic interaction of regional environmental regulation—an explanation on the universality of incomplete enforcement of environmental regulation. China Ind Econ 7:74–90. https://doi.org/10.19581/j.cnki.ciejournal.2016.07.006
Zhang Q, Zheng Y, Kong D (2019) Local environmental governance pressure, executive’s working experience and enterprise investment in environmental protection: a quasi-natural experiment based on China’s “Ambient Air Quality Standards 2012.” Econ Res J 54:183–198
Funding
This research is supported by [National Social Science Fund of China] (Grant numbers [20BJL040]).
Author information
Authors and Affiliations
Contributions
G BN designed the study and proposed the methodology. F WZ collected the data and analyzed it and wrote the paper. Y YS checked the spelling of the paper and corrected the mistakes. Z H verified the authenticity of the data analysis. H F conducted empirical analysis and proposed some countermeasures.
Corresponding author
Ethics declarations
Ethical approval
I have not submitted my manuscript to more than one journal for simultaneous consideration.
This study has not been made public.
Results are presented clearly, honestly, and without fabrication, or inappropriate data manipulation. Authors adhere to discipline-specific rules for acquiring, selecting, and processing data.
No data, text, or theories by others are presented as if they were the plagiarism.
Consent to participate
All authors agree with the content of the submission, and all agree to continue to support the follow-up work.
Consent for publication
This manuscript has not been submitted or published in other journals, and the authors agree to consent to publish.
Competing interests
The authors declare no competing interests.
Additional information
Responsible Editor: Eyup Dogan
Publisher's Note
Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.
Rights and permissions
Springer Nature or its licensor (e.g. a society or other partner) holds exclusive rights to this article under a publishing agreement with the author(s) or other rightsholder(s); author self-archiving of the accepted manuscript version of this article is solely governed by the terms of such publishing agreement and applicable law.
About this article
Cite this article
Guo, B., Feng, W., Yu, Y. et al. Can environmental tax improve the environmental investment? Evidence from a quasi-natural experiment in China. Environ Sci Pollut Res 30, 113846–113858 (2023). https://doi.org/10.1007/s11356-023-30272-7
Received:
Accepted:
Published:
Issue Date:
DOI: https://doi.org/10.1007/s11356-023-30272-7