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Environmental protection fee-to-tax and enterprise investment efficiency: Evidence from China

Author

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  • Xie, Linlin
  • Zuo, Shiyue
  • Xie, Ziqin

Abstract

This study takes an environmental protection tax as its research background and uses the difference-in-differences method to study the effect of environmental taxes on the investment efficiency of enterprises. The results show that the implementation of environmental taxes significantly reduces the investment efficiency of enterprises. Further evidence shows that the negative effect of environmental taxes on investment efficiency is partly due to a blind increase in the scale of green investment after the policy is implemented and partly because the overall efficiency of green investment is low. Heterogeneity test results show that there are significant differences in the effect of the implementation of environmental taxes policy on the enterprises with various firm ownership characteristics, geographical locations and enterprise sizes. The conclusions of this study provide a basis for China to achieve the goal of carbon emissions peaking and carbon neutrality, and also provide theoretical guidance for other countries.

Suggested Citation

  • Xie, Linlin & Zuo, Shiyue & Xie, Ziqin, 2023. "Environmental protection fee-to-tax and enterprise investment efficiency: Evidence from China," Research in International Business and Finance, Elsevier, vol. 66(C).
    • Handle: RePEc:eee:riibaf:v:66:y:2023:i:c:s0275531923001836
    DOI: 10.1016/j.ribaf.2023.102057
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    References listed on IDEAS

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    Citations

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    Cited by:

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    4. Tao, Miaomiao & Wu, Sihong, 2025. "From polluter pays to polluter reborn: Exploring the economic and green implications of corporate carbon risk exposure," Energy Economics, Elsevier, vol. 144(C).
    5. Yang, Yupeng & Chen, Xingxing & Li, Lidan & Song, Xianzhong, 2025. "Greening IPOs: An investigation of the impact of environmental verification on pollution reduction," Research in International Business and Finance, Elsevier, vol. 76(C).
    6. Ge, Tao & Hao, Zixuan & Chen, Yuan & Chen, Zhanbo, 2024. "Energy intensity constraints and corporate investment strategies: Evidence from Chinese listed enterprises," Finance Research Letters, Elsevier, vol. 64(C).
    7. Yang, Zhijiu & You, Fengyi & Qin, Yanfang & Wu, Ge, 2025. "Environmental taxes, political connections, and firm financialization: Evidence from China's environmental tax reform," Finance Research Letters, Elsevier, vol. 78(C).
    8. Yu, Lianchao & Sha, Haobin & Liu, Qiang & Yan, Guowan, 2024. "Environmental judicial independence and corporate investment efficiency: Evidence from a quasi-natural experiment in China," International Review of Economics & Finance, Elsevier, vol. 96(PA).
    9. Du, Jiangze & Li, Zhiwei & Shi, Guoping & Wang, Bin, 2024. "Can “environmental protection fee to tax” reduce carbon emissions? Evidence from China," Finance Research Letters, Elsevier, vol. 62(PB).
    10. Yu, Lianchao & Sha, Haobin & Ji, Peinan, 2025. "Government-led voluntary environmental regulation and corporate investment efficiency: Evidence from the green factory certification in China," Energy Economics, Elsevier, vol. 152(C).
    11. Wei, Rongrong & Yu, Zhaopeng & Zhen, Deyun, 2025. "The differentiated effect of China's new environmental protection law on corporate ESG performance," Economic Analysis and Policy, Elsevier, vol. 85(C), pages 2126-2141.
    12. Yuan, Kaihua & Cui, Jingyuan & Zhang, Haipeng & Gao, Xiang, 2023. "Do cleaner production standards upgrade the global value chain position of manufacturing enterprises? Empirical evidence from China," Energy Economics, Elsevier, vol. 128(C).
    13. Wang, Haoyu & Lyu, Kefu, 2025. "Environmental tone and carbon market behavior: Understanding market dynamics through corporate environmental attitudes in China," Structural Change and Economic Dynamics, Elsevier, vol. 74(C), pages 792-813.

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