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eISSN: 2083-5906
ISSN: 1230-1485
ISSN: 1230-1485
ORIGINAL RESEARCH
The Impact of Environmental Protection
Tax Reform on Corporate Performance:
An Empirical Analysis in China
1
College of Humanities and Social Sciences, Jiangsu University of Science and Technology,
Zhenjiang321100; No. 666 Changhui Road, Zhenjiang, Jiangsu, P.R. China
Submission date: 2024-03-19
Final revision date: 2024-06-09
Acceptance date: 2024-06-30
Online publication date: 2024-11-07
Publication date: 2025-07-05
Corresponding author
Hao Zhang
School of Humanities and Social Sciences, Jiangsu University of Science and Technology, No. 666, Changhui Road, 212000, Zhenjiang, China
School of Humanities and Social Sciences, Jiangsu University of Science and Technology, No. 666, Changhui Road, 212000, Zhenjiang, China
Pol. J. Environ. Stud. 2025;34(5):5425-5442
KEYWORDS
Porter’s hypothesisenvironmental protection taxfirm performance digital transformationstrategic green innovation
TOPICS
ABSTRACT
The full implementation of an environmental protection tax is an important measure to realize
the goal of emission reduction and promote the comprehensive green transformation of economic
and social development. In this paper, we take China’s environmental protection tax reform
as a “quasi-natural experiment”, based on the data of A-share listed companies from 2013 to 2022,
and utilize a differences-in-differences (DID) model to assess the impact of this policy
on the performance of heavily polluting firms. The study finds that the environmental protection
tax reform improves the performance of heavily polluting firms by 1.09% on average, which still holds
after a series of robustness tests. Mechanistic analysis shows that environmental protection tax reform
improves firm performance by accelerating firms’ digital transformation and increasing strategic green
innovation activities. Heterogeneity analysis shows that the improvement of environmental protection
tax reform on the performance of heavily polluting firms will be more obvious in large-scale firms
and tax burden-raising regions. This paper provides micro-empirical evidence to further promote
the improvement and implementation of the environmental protection tax system.
CONFLICT OF INTEREST
The authors declare that they have no known competing financial interests or personal relationships that could have appeared to influence the work reported in this paper.
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| eISSN: | 2083-5906 |
| ISSN: | 1230-1485 |
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