 Environmental protection tax and firms’ ESG investment: Evidence from ChinaXiaolin Wang and Yingying Ye Economic Modelling, 2024, vol. 131, issue C Abstract: We examine whether and how environmental protection tax (EPT) affects environmental governance performance of firms. To address this problem, we first construct unique indicators to present the different environmental governance of firms in the aspect of E, S, and G, and then combine them with panel data of Chinese listed companies from 2013 to 2020. Through the empirical analysis, we find that EPT has a positive effect on the ESG investment of firms, and the positive effect is more pronounced in private firms, firms with weak competitiveness, and firms located in cities with sound environmental justice. We also find that the pressure on tax payment cost and ex-post non-compliance cost caused by EPT improves the ESG investment of firms. Overall, this paper emphasizes the importance of EPT in promoting the environmental governance of firms. Keywords: Environmental protection tax (EPT); Green-producing investment; Green responsibility investment; Environmental information disclosure; Environmental social and governance (ESG); Cost pressure (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:ecmode:v:131:y:2024:i:c:s0264999323004339 DOI: 10.1016/j.econmod.2023.106621 Access Statistics for this article Economic Modelling is currently edited by S. Hall and P. Pauly More articles in Economic Modelling from Elsevier |
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