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Can the policy of income taxes merger reduce air pollution emission of enterprises? Evidence from China

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  • Ma, Wenjing
  • Wang, Ruitian
  • Li, Yunlong
  • Yang, Junjie

Abstract

This study examines how a uniform income tax rate affects Chinese domestic and international firms in 2008. Specifically, it investigates how this tax policy affects these enterprises’ air pollution emissions through a difference-in-differences (DID) model. Data suggest that implementing the Policy of Income Taxes Merger can effectively decrease the pollutant emission intensity of enterprises. This program aims to provide tax benefits to Chinese domestic firms while addressing pollution emissions by alleviating financial limitations and enhancing production efficiency.

Suggested Citation

  • Ma, Wenjing & Wang, Ruitian & Li, Yunlong & Yang, Junjie, 2024. "Can the policy of income taxes merger reduce air pollution emission of enterprises? Evidence from China," Finance Research Letters, Elsevier, vol. 69(PB).
    • Handle: RePEc:eee:finlet:v:69:y:2024:i:pb:s1544612324011383
    DOI: 10.1016/j.frl.2024.106109
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    1. Jinzhi Tong & Youyou Yang & Chunhua Zheng & Minglan Zheng, 2024. "Do Fiscal Incentives Contribute to Pollution Control? Empirical Evidence from China," Sustainability, MDPI, vol. 16(22), pages 1-21, November.
    2. Jiang, Tao & Fan, Jiabiao, 2025. "How does the policy of additional deduction for research and development expenses affect credit risk pricing capability in enterprises?," Finance Research Letters, Elsevier, vol. 77(C).

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    Keywords

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    JEL classification:

    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • H32 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Firm
    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling

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