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Green Taxation Promotes the Intelligent Transformation of Chinese Manufacturing Enterprises: Tax Leverage Theory

Author

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  • Longzhen Yu

    (College of Economics and Management, Qingdao University of Science and Technology, Qingdao 266061, China)

  • Jianhua Zhu

    (College of Economics and Management, Qingdao University of Science and Technology, Qingdao 266061, China)

  • Zhixian Wang

    (College of Economics and Management, Qingdao University of Science and Technology, Qingdao 266061, China)

Abstract

A key issue that concerns governments is how to formulate optimal technology subsidies and green tax standards to promote the intelligent transformation of manufacturing enterprises. In this work, the Pollutant Emission Indicator Trading Mechanism (PEITM) is proposed, and green taxes are divided into Tax of Pollutant Emissions (TPE) and the Tax of Excess Pollutant Emissions (TEPE). On this basis, we study the impact of green taxes and technology subsidies on the intelligent transformation of enterprises in different manufacturing environments from the government’s perspective and provide the optimal government subsidy scheme under different green tax policies. Although it seems counter-intuitive, enterprises’ usual responses to increases in TPE and TEPE are non-monotonic. Moreover, we find a threshold effect for the government’s green taxation. Blindly increasing or reducing taxes may not promote intelligent transformation, but instead force enterprises towards negative choices. Lastly, an effective measure for the government to promote the intelligent transformation of manufacturing enterprises is proposed: by properly adjusting TPE and TEPE, governments can produce more cost-effective intelligent products than ordinary ones. Consequently, intelligent products will sell better than ordinary products, and manufacturing enterprises will be able to consciously carry out intelligent transformation to remain viable.

Suggested Citation

  • Longzhen Yu & Jianhua Zhu & Zhixian Wang, 2021. "Green Taxation Promotes the Intelligent Transformation of Chinese Manufacturing Enterprises: Tax Leverage Theory," Sustainability, MDPI, vol. 13(23), pages 1-27, December.
    • Handle: RePEc:gam:jsusta:v:13:y:2021:i:23:p:13321-:d:692950
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    Cited by:

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    2. P. Ebin Babu & Riya Mary, 2022. "Exploring the Research Trends in Green Tax: Bibliometric Analysis," International Journal of Energy Economics and Policy, Econjournals, vol. 12(6), pages 157-162, November.
    3. Beata Zofia Filipiak & Dorota Wyszkowska, 2022. "Determinants of Reducing Greenhouse Gas Emissions in European Union Countries," Energies, MDPI, vol. 15(24), pages 1-24, December.
    4. Li Yao & Minyan Jin, 2024. "Impacts of green taxation on the green transformation of manufacturing industry: an empirical analysis based on Chinese provincial panel data," Economic Change and Restructuring, Springer, vol. 57(1), pages 1-27, February.

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