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Environmental tax refund policy, cross-regional corporate investment, and green governance

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  • Liu, Chunxia
  • Jia, Xiaokui

Abstract

This study assesses the repercussions of the environmental tax refund policy on corporate green governance. Also, it looks into the mediating function of transnational investment through the DID approach, using a pool of Chinese A-share listed companies between 2012 and 2024. The results show that the environmental tax refund policy significantly improved the company's green governance, and cross-regional investment (the participation in, the times of, and the amount of cross-regional investment) was an important mediating variable. This holds even after a placebo test, and controls for self-selection bias with propensity matching and difference in differences, omitted factors, and external disruption. The findings offer policymakers guidance on designing effective environmental tax refund schemes and provide companies with strategies to adopt these policies, thereby becoming greener through investments in various areas.

Suggested Citation

  • Liu, Chunxia & Jia, Xiaokui, 2026. "Environmental tax refund policy, cross-regional corporate investment, and green governance," Finance Research Letters, Elsevier, vol. 90(C).
    • Handle: RePEc:eee:finlet:v:90:y:2026:i:c:s1544612325025401
    DOI: 10.1016/j.frl.2025.109291
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