The Impact of Environmental Protection Tax on High-Quality Enterprise Development: Evidence from China

DOI

10.2991/978-94-6239-640-1_9How to use a DOI?

Keywords

Environmental Protection Tax; High-Quality Enterprise Development; Green Innovation; ESG Performance; Managerial Short-Termism

Abstract

This study investigates the impact of China’s Environmental Protection Tax (EPT), implemented in 2018 as a quasi-natural experiment replacing the pollution discharge fee, on high-quality enterprise development. Utilizing a difference-in-differences (DID) model with panel data from listed companies on the Shanghai and Shenzhen stock exchanges (2015-2023), the research focuses on heavily polluting firms as the treatment group. The findings reveal that the EPT significantly promotes enterprise high-quality development, proxied by total factor productivity (TFP_LP), despite potential short-term cost increases. This positive effect operates primarily through a synergistic triple mechanism: enhanced green innovation, improved ESG (Environmental, Social, and Governance) performance, and the suppression of managerial short-termism. Heterogeneity analysis indicates that the positive impact is more pronounced for large enterprises and state-owned enterprises (SOEs), while small and medium-sized enterprises (SMEs) and non-SOEs face greater transformation challenges due to resource constraints and market pressures. The results support the Porter Hypothesis, demonstrating that environmental regulation can stimulate innovation and efficiency gains. The study concludes with policy recommendations for differentiated tax design, strengthened ESG incentives, optimized corporate governance, and coordinated policy support systems to foster enterprise transformation towards high-quality development.

Copyright

© 2026 The Author(s)

Open Access

Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

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TY  - CONF
AU  - Yanxiang Li
AU  - Jinyuan Liu
PY  - 2026
DA  - 2026/04/20
TI  - The Impact of Environmental Protection Tax on High-Quality Enterprise Development: Evidence from China
BT  - Proceedings of the 2026 5th International Conference on Big Data Economy and Digital Management (BDEDM 2026)
PB  - Atlantis Press
SP  - 91
EP  - 111
SN  - 2352-5428
UR  - https://doi.org/10.2991/978-94-6239-640-1_9
DO  - 10.2991/978-94-6239-640-1_9
ID  - Li2026
ER  -