Green Taxation Promotes the Intelligent Transformation of Chinese Manufacturing Enterprises: Tax Leverage Theory

Longzhen Yu, Jianhua Zhu and Zhixian Wang
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Longzhen Yu: College of Economics and Management, Qingdao University of Science and Technology, Qingdao 266061, China
Jianhua Zhu: College of Economics and Management, Qingdao University of Science and Technology, Qingdao 266061, China
Zhixian Wang: College of Economics and Management, Qingdao University of Science and Technology, Qingdao 266061, China

Sustainability, 2021, vol. 13, issue 23, 1-27

Abstract: A key issue that concerns governments is how to formulate optimal technology subsidies and green tax standards to promote the intelligent transformation of manufacturing enterprises. In this work, the Pollutant Emission Indicator Trading Mechanism (PEITM) is proposed, and green taxes are divided into Tax of Pollutant Emissions (TPE) and the Tax of Excess Pollutant Emissions (TEPE). On this basis, we study the impact of green taxes and technology subsidies on the intelligent transformation of enterprises in different manufacturing environments from the government’s perspective and provide the optimal government subsidy scheme under different green tax policies. Although it seems counter-intuitive, enterprises’ usual responses to increases in TPE and TEPE are non-monotonic. Moreover, we find a threshold effect for the government’s green taxation. Blindly increasing or reducing taxes may not promote intelligent transformation, but instead force enterprises towards negative choices. Lastly, an effective measure for the government to promote the intelligent transformation of manufacturing enterprises is proposed: by properly adjusting TPE and TEPE, governments can produce more cost-effective intelligent products than ordinary ones. Consequently, intelligent products will sell better than ordinary products, and manufacturing enterprises will be able to consciously carry out intelligent transformation to remain viable.

Keywords: intelligent transformation; green taxes; environmental governance; technology subsidy; market transaction mechanism (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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