Does environmental protection tax impact corporate ESG greenwashing? A quasi-natural experiment in China

Cuixia Jiang, Xiuxiu Li, Qifa Xu and Junhang Liu

Economic Analysis and Policy, 2024, vol. 84, issue C, 774-786

Abstract: The recently implemented environmental protection tax (EPT) policy in China provides the opportunity to conduct a quasi-natural experiment to empirically evaluate environmental regulations’ impact on corporate practices. We adopt the difference-in-differences method to analyze the effect and mechanisms of the EPT on corporate environmental, social, and governance (ESG) greenwashing based on Chinese A-share listed companies from 2015 to 2021. The empirical results show that the EPT drives companies to engage in ESG greenwashing, significantly increasing ESG greenwashing by approximately 13.16 %. The mechanism tests demonstrate that the EPT exerts governance pressure but does not create more resources, making companies more likely to achieve compliance through greenwashing. Furthermore, the effect of the EPT on ESG greenwashing is more pronounced for large companies and those located in regions with high economic development and strong regulatory enforcement. Our study provides solid evidence with valuable implications for improving the EPT policy to achieve green and sustainable development.

Keywords: EPT; Environmental regulation; ESG; ESG greenwashing; Sustainable development (search for similar items in EconPapers)
Date: 2024
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0313592624002522
Full text for ScienceDirect subscribers only

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:eee:ecanpo:v:84:y:2024:i:c:p:774-786

DOI: 10.1016/j.eap.2024.09.029

Access Statistics for this article

Economic Analysis and Policy is currently edited by Clevo Wilson

More articles in Economic Analysis and Policy from Elsevier
Bibliographic data for series maintained by Catherine Liu ().