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Value-added tax neutrality and enterprise green strategy: Evidence from China’s credit refund reform

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  • Liao, Chengyun
  • Li, Huihui

Abstract

Using data from China’s A-share listed companies from 2010 to 2021, this paper applies a difference-in-differences approach to examine how the value-added tax credit refund influences enterprise green strategies. Empirical and mechanism analyses indicate that the policy significantly strengthens firms’ green strategies by increasing operating cash flow and raising their willingness to assume risk. These findings offer empirical support for selecting tax instruments that encourage firms to adopt greener strategic orientations. They also provide practical insight for assessing the reform’s effectiveness, refining targeted tax preferences, and enabling enterprises to advance sustainable development.

Suggested Citation

  • Liao, Chengyun & Li, Huihui, 2026. "Value-added tax neutrality and enterprise green strategy: Evidence from China’s credit refund reform," Finance Research Letters, Elsevier, vol. 89(C).
    • Handle: RePEc:eee:finlet:v:89:y:2026:i:c:s1544612325024183
    DOI: 10.1016/j.frl.2025.109169
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