Does the environmental tax influence the siting of foreign-invested manufacturing enterprises? Evidence from China

Yongsheng Lin, Qiuyue Yin, Bo Yuan, Zhanfeng Dong and Wei Wei

Journal of Environmental Planning and Management, 2024, vol. 67, issue 12, 2837-2862

Abstract: Based on unique firm-level microdata, this study adopts the conditional logit model to empirically evaluate the impact of the environmental tax on the siting of foreign-invested manufacturing enterprises. We also explore the trade-offs of the environmental tax by assessing its economic costs and benefits. This study finds that the environmental tax has a statistically significant and negative impact on the siting of foreign-invested enterprises, as verified by a series of robustness checks. This result implies a trade-off of the environmental tax, reducing pollutant emissions at the expense of damaging economic growth. Heterogeneous analysis finds that the siting is remarkably more sensitive for foreign-invested enterprises that are sole-venture, in high-polluting industries, small-scale, or hosted by developing countries. The other trade-off is outlined: although the environmental tax reduces the number of newly registered foreign-invested enterprises, it brings some economic benefits by making the structure of foreign investment cleaner and more advanced.

Date: 2024
References: Add references at CitEc
Citations:

Downloads: (external link)
http://hdl.handle.net/10.1080/09640568.2023.2205570 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:taf:jenpmg:v:67:y:2024:i:12:p:2837-2862

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/CJEP20

DOI: 10.1080/09640568.2023.2205570

Access Statistics for this article

Journal of Environmental Planning and Management is currently edited by Dr Neil Powe, Dr Ken Willis and George Bill Page

More articles in Journal of Environmental Planning and Management from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().