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Environmental Protection Tax Reform and the Risk of Enterprises' Low-Carbon Transformation: A Quasi-Natural Experiment Based on Environmental Protection "Fee to Tax"

Author(s)

Mengya Wang1, Qing Zheng2, Liwen Lu1

Affiliation(s)

1North China University of Science and Technology, Tangshan, Hebei, China 2Hebei University of Economics and Business, Shijiazhuang, Hebei, China

Abstract

In the context of the "dual carbon" goal, it is of great significance to identify institutional arrangements that can effectively mitigate the risks of low-carbon transformation of enterprises. This paper takes A-share listed companies from 2010 to 2024 as a sample and constructs a double difference model (DID) based on the implementation of the quasi-natural experiment of environmental protection "fee to tax" in 2018 to empirically test the impact of environmental protection tax reform on the low-carbon transformation risk of enterprises. The study found that the "fee-to-tax" environmental protection significantly reduces the risk of low-carbon transformation of enterprises, and this conclusion is still valid after a number of robustness tests. The mechanism analysis shows that environmental protection tax plays a risk mitigation role by promoting green innovation, easing financing constraints, and enhancing executives' green awareness. Further analysis shows that corporate ESG performance has a certain distorting effect on effects, and some enterprises may replace substantive low-carbon investment with "signal-based" improvements such as information disclosure.

Keywords

Environmental Protection Tax; Low-Carbon Transition Risks; ESG Distortion Effect; Green Innovation

References

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