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The Impact of environmental protection tax on corporate ESG performance and corporate green behavior

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  • Huang, Youwei
  • Liu, Chaoyang
  • Wang, Li
  • Qi, Yuzhu

Abstract

This study examines the impact of environmental protection tax reform on corporate green behavior and ESG performance. Our empirical analysis reveals that the enactment of environmental protection tax significantly enhances corporate ESG performance. Furthermore, we document that this tax reform influences corporate green behavior through multiple channels: it increases environmental investment, accelerates green technological innovation, and improves financial conditions through tax-related financial incentives. The effect of improved ESG performance is more evident in state-owned enterprises, enterprises in regions with increased tax rates, and small enterprises. The findings of this study have implications for governments and policymakers considering using tax laws to affect corporate ESG performance and corporate green behavior.

Suggested Citation

  • Huang, Youwei & Liu, Chaoyang & Wang, Li & Qi, Yuzhu, 2025. "The Impact of environmental protection tax on corporate ESG performance and corporate green behavior," Research in International Business and Finance, Elsevier, vol. 75(C).
    • Handle: RePEc:eee:riibaf:v:75:y:2025:i:c:s0275531925000285
    DOI: 10.1016/j.ribaf.2025.102772
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    References listed on IDEAS

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    1. Zhu, Qin & Zhou, Xiangxiang, 2025. "Digital trade and firm ESG performance: The perspective of finance development," Research in International Business and Finance, Elsevier, vol. 77(PA).

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