Exploring the Triple Dividend Effect and Threshold Effect of Environmental Protection Tax: Evidence from Chinese Listed Companies

Chenghao Ye, Hongjie Gao and Igor A. Mayburov ()
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Chenghao Ye: Institute of Economics and Management, Ural Federal University Named After the First President of Russia B.N. Yeltsin, Yekaterinburg 620062, Russia
Hongjie Gao: Institute of Economics and Management, Ural Federal University Named After the First President of Russia B.N. Yeltsin, Yekaterinburg 620062, Russia
Igor A. Mayburov: Institute of Economics and Management, Ural Federal University Named After the First President of Russia B.N. Yeltsin, Yekaterinburg 620062, Russia

Sustainability, 2025, vol. 17, issue 15, 1-29

Abstract: This study uses financial data from 872 Chinese listed companies (2018–2022). It tests the triple dividend effect and threshold effect of China’s environmental protection tax (EPT) using high-dimensional fixed effects models and panel threshold models. We document that (1) EPT creates an environmental dividend for Chinese listed companies. It significantly reduces pollution emissions. A 1-unit tax increase reduces LnTPPE by 2.5%. (2) EPT creates a significant innovation dividend. It forces enterprises to improve the quality of authorized patents. A 1-unit tax increase raises patent technological complexity by 0.79%. (3) EPT creates an economic dividend. It significantly improves firm performance. A 1-unit tax increase raises relative corporate revenue by 38.1%. (4) EPT exerts significant threshold effects on micro-level triple dividend outcomes among Chinese listed companies. A heterogeneity analysis shows significant differences in threshold effects between non-heavily polluting and heavily polluting industries. This study confirms that China’s EPT generates a micro-level triple dividend effect alongside coexisting threshold effects for listed companies. This provides literature references for China to design and implement differentiated policies and offers a quantitative empirical case for implementing globally sustainable EPT strategies.

Keywords: Chinese listed companies; environmental protection tax (EPT); triple dividend effect; threshold effect (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2025
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