How does Environmental Protection Tax Law affect corporate investment preferences?

Xin Zhang and Chenxiao Shi

Finance Research Letters, 2025, vol. 72, issue C

Abstract: This study examines the influence of implementing the Environmental Protection Tax Law on the investment choices of multinational corporations by analyzing data from China's A-share listed companies spanning the years 2006 to 2022. The enforcement of the Environmental Protection Tax Law can stimulate company investment in tangible business operations while curbing corporate financialization. The mechanism test illustrates that implementing the Environmental Protection Tax can impede business financialization by significantly increasing environmental and research and development spending. This article presents policy suggestions for effectively implementing environmental legislation, aggressively reducing firm financial risks, and promoting genuine economic growth.

Keywords: The Environmental Protection Tax Law; Corporate financialization; Real business development (search for similar items in EconPapers)
Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S1544612324015277
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:finlet:v:72:y:2025:i:c:s1544612324015277

DOI: 10.1016/j.frl.2024.106498

Access Statistics for this article

Finance Research Letters is currently edited by R. Gençay

More articles in Finance Research Letters from Elsevier
Bibliographic data for series maintained by Catherine Liu ().