IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v16y2024i14p5902-d1432803.html

Does Tax Incentives Matter to Enterprises’ Green Technology Innovation? The Mediating Role on R&D Investment

Author

Listed:
  • Haijun Wang

    (School of Management, Jiangsu University, Zhenjiang 212013, China
    These authors contributed equally to this work.)

  • Jinlan Yang

    (School of Finance & Economics, Jiangsu University, Zhenjiang 212013, China
    These authors contributed equally to this work.)

  • Naiping Zhu

    (School of Finance & Economics, Jiangsu University, Zhenjiang 212013, China
    Jiangsu Collaborative Innovation Center of Modern Public Finance and Taxation Governance, Nanjing 210000, China)

Abstract

This study focused on China’s A-share listed companies from 2017 to 2022, and concluded that tax incentives have a positive impact on the performance of green technology innovation, and that value-added tax preferences are more effective than income tax preferences. Tax incentives guide enterprises to increase R&D investment, and R&D investment constitutes the mechanism of tax incentives to promote the performance green technology innovation. Non-state-owned enterprises benefit more from the timely help of tax incentives. Higher levels of the business environment in certain regions lead to more significant promoting effects of tax incentives. Enterprises in non-heavily polluting industries are more easily incentivized by preferential tax policies to undertake more green innovations. The study’s findings aimed to improve current preferential tax policies and help enterprises achieve green and innovative development.

Suggested Citation

  • Haijun Wang & Jinlan Yang & Naiping Zhu, 2024. "Does Tax Incentives Matter to Enterprises’ Green Technology Innovation? The Mediating Role on R&D Investment," Sustainability, MDPI, vol. 16(14), pages 1-20, July.
    • Handle: RePEc:gam:jsusta:v:16:y:2024:i:14:p:5902-:d:1432803
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/16/14/5902/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2071-1050/16/14/5902/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Feng, Wei & Li, Jiajia, 2021. "International technology spillovers and innovation quality: Evidence from China," Economic Analysis and Policy, Elsevier, vol. 72(C), pages 289-308.
    2. Li, Yueshan & Mao, Jinzhou & Chen, Shoudong & Yang, Dongliang, 2022. "Tax-reducing incentive and corporate green performance: What we learn from China," Renewable Energy, Elsevier, vol. 199(C), pages 791-802.
    3. Zee, Howell H. & Stotsky, Janet G. & Ley, Eduardo, 2002. "Tax Incentives for Business Investment: A Primer for Policy Makers in Developing Countries," World Development, Elsevier, vol. 30(9), pages 1497-1516, September.
    4. Jingjing Liu & Min Zhao & Chao Zhang & Fangrong Ren, 2023. "Analysis of the Influence of Heterogeneous Environmental Regulation on Green Technology Innovation," Sustainability, MDPI, vol. 15(4), pages 1-20, February.
    5. Naiping Zhu & Jinyu Qian & Jinlan Yang, 2024. "Corporate social responsibility, financing capacity and innovation investment -- an empirical analysis based on a-share listed high tech enterprises," Applied Economics Letters, Taylor & Francis Journals, vol. 31(11), pages 1019-1023, June.
    6. Guo, Yuanyu & Xie, Wenlan & Yang, Yang, 2024. "Dual green innovation capability, environmental regulation intensity, and high-quality economic development in China: Can green and growth go together?," Finance Research Letters, Elsevier, vol. 63(C).
    7. Cui, Wei & Hicks, Jeffrey & Xing, Jing, 2022. "Cash on the table? Imperfect take-up of tax incentives and firm investment behavior," Journal of Public Economics, Elsevier, vol. 208(C).
    8. Cansino, José M. & Pablo-Romero, María del P. & Román, Rocío & Yñiguez, Rocío, 2010. "Tax incentives to promote green electricity: An overview of EU-27 countries," Energy Policy, Elsevier, vol. 38(10), pages 6000-6008, October.
    9. Xu, Bin & Lin, Boqiang, 2024. "Green finance, green technology innovation, and wind power development in China: Evidence from spatial quantile model," Energy Economics, Elsevier, vol. 132(C).
    10. Kam, Hermann & Potter, Clive, 2024. "Who should deliver agri-environmental public goods in the UK? New land managers and their future role as public good providers," Land Use Policy, Elsevier, vol. 139(C).
    11. Manolis Manioudis & Giorgos Meramveliotakis, 2022. "Broad strokes towards a grand theory in the analysis of sustainable development: a return to the classical political economy," New Political Economy, Taylor & Francis Journals, vol. 27(5), pages 866-878, September.
    12. Song, Yang & Zhang, Zhiyuan & Sahut, Jean-Michel & Rubin, Ofir, 2023. "Incentivizing green technology innovation to confront sustainable development," Technovation, Elsevier, vol. 126(C).
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Yongjun Chen & Wei Li & Longji Zeng & Min Chen, 2025. "Quality or Quantity? The Impact of Voluntary Environmental Regulation on Firm’s Green Technological Innovation: Evidence from Green Factory Certification in China," Sustainability, MDPI, vol. 17(6), pages 1-31, March.
    2. Bingnan Guo & Baoliang Zhan & Mengyu Wang, 2025. "How Does Green Financial Reform Impact Carbon Emission Reduction and Pollutant Mitigation in Chinese Manufacturing Enterprises?," Sustainability, MDPI, vol. 17(17), pages 1-23, August.
    3. Li Chen & Xiankun Deng, 2024. "Executive Accountability Pressure and Green Innovation: Evidence from China," Sustainability, MDPI, vol. 17(1), pages 1-25, December.
    4. Zhou, Yuan & Zhang, Qintian & Xu, Guannan & Wang, Yanmeng, 2025. "Regional S&T planning and green generic technologies: A spatial differences-in-difference analysis," Energy Economics, Elsevier, vol. 150(C).
    5. Wu, Zihang & Zeng, Ning & Song, Jiansong, 2025. "Tax incentives and corporate technological innovation performance: An analysis from the perspective of R&D investment," International Review of Economics & Finance, Elsevier, vol. 102(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Weisheng Mao & Yexi Zhong, 2024. "The Influence of Demand-Based Policy Instruments on Urban Innovation Quality—Evidence from 269 Cities in China," Sustainability, MDPI, vol. 16(7), pages 1-16, March.
    2. Husain, Afzol & Karim, Sitara & Sensoy, Ahmet, 2024. "Financial fusion: Bridging Islamic and Green investments in the European stock market," International Review of Financial Analysis, Elsevier, vol. 94(C).
    3. He, Fan & Zeng, Xin & Xue, Jingwen & Xu, Jianbin, 2024. "The hidden cost of corporate tax cuts: Evidence from worker health in China," China Economic Review, Elsevier, vol. 86(C).
    4. Hui Yang & Jingye Li & Stefan Sieber & Kaisheng Long, 2025. "Does Digital Village Construction Affect the Sustainable Intensification of Cultivated Land Use? Evidence from Rural China," Agriculture, MDPI, vol. 15(9), pages 1-24, April.
    5. Jianwei Qian & Runan Xiong, 2025. "Policy Instruments for Inclusive and Sustainable Development: Empirical Insights from China’s Pilot Free Trade Zones," Sustainability, MDPI, vol. 17(17), pages 1-23, August.
    6. Sijbren Cnossen, 2013. "Preparing the way for a modern GST in India," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 20(4), pages 715-723, August.
    7. Eduardo Rodrigues Sanguinet & Francisco de Borja García-García, 2023. "Rural-Urban Linkages: Regional Financial Business Services’ Integration into Chilean Agri-Food Value Chains," Sustainability, MDPI, vol. 15(14), pages 1-22, July.
    8. World Bank, 2005. "Dominica : OECS Fiscal Issues, Policies to Achieve Fiscal Sustainability and Improve Efficiency and Equity of Public Expenditures," World Bank Publications - Reports 8681, The World Bank Group.
    9. Angelina Kissiwaa Twum & Jijian Zhang & Xuhui Ding & Joana Cobbinah, 2025. "Realizing Green Growth in Belt and Road Initiative Economies: The Roles of Financial Support, Renewable Energy, and Eco-Footprint Dynamics," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 16(6), pages 18738-18773, December.
    10. repec:ecr:col037:5367 is not listed on IDEAS
    11. Hui Wang & Yao Xu, 2024. "Optimized Decision-Making for Multi-Market Green Power Transactions of Electricity Retailers under Demand-Side Response: The Chinese Market Case Study," Energies, MDPI, vol. 17(11), pages 1-15, May.
    12. Venkat Ram Reddy Ganuthula, 2025. "AI-enabled individual entrepreneurship theory: redefining scale, capability, and sustainability in the digital age," Journal of Innovation and Entrepreneurship, Springer, vol. 14(1), pages 1-21, December.
    13. Tai-Hsi Wu & Chun-Wei Ho & Tony Shun-Te Yuo & Chantalle Elisabeth Rietdijk & Edy Trihatmoko, 2026. "Evaluating Global Socio-Ecological System Performance: a Structural Perspective," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 17(1), pages 944-980, February.
    14. Abdramane Camara, 2023. "The Effect of Foreign Direct Investment on Tax Revenue," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 65(1), pages 168-190, March.
    15. Keminhui Liu, 2024. "Impact of Heterogeneous Environmental Regulation on Carbon Emissions: Firm-Level Evidence from China's Manufacturing Industry," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 16(12), pages 1-44, December.
    16. Degirmenci, Tunahan & Yavuz, Hakan, 2024. "Environmental taxes, R&D expenditures and renewable energy consumption in EU countries: Are fiscal instruments effective in the expansion of clean energy?," Energy, Elsevier, vol. 299(C).
    17. Burcin Atilgan Turkmen & Fatos Germirli Babuna, 2024. "Life Cycle Environmental Impacts of Wind Turbines: A Path to Sustainability with Challenges," Sustainability, MDPI, vol. 16(13), pages 1-23, June.
    18. Sun, Chuanwang & Zhan, Yanhong & Du, Gang, 2020. "Can value-added tax incentives of new energy industry increase firm's profitability? Evidence from financial data of China's listed companies," Energy Economics, Elsevier, vol. 86(C).
    19. Pravee Kruachottikul & Pinnaree Tea-makorn & Poomsiri Dumrongvute & Solaphat Hemrungrojn & Natawut Nupairoj & Ornsiree Junchaya & Sukrit Vinayavekhin, 2024. "MediGate: a MedTech product innovation development process from university research to successful commercialization within emerging markets," Journal of Innovation and Entrepreneurship, Springer, vol. 13(1), pages 1-43, December.
    20. World Bank, 2005. "Afghanistan - Managing Public Finance for Development : Volume 3, Key Cross-cutting Issues," World Bank Publications - Reports 8391, The World Bank Group.
    21. Mihai Dinu & Silviu Ionuț Beia & Simona Roxana Pătărlăgeanu & Alina Florentina Gheorghe & Irina Denisa Munteanu & Mihail Dumitru Sacală, 2025. "Exploring the Impact of Wheat Prices and Annual Income on Pig Carcass Prices in European Countries: A Spatial Panel Regression Analysis," Agriculture, MDPI, vol. 15(21), pages 1-14, October.

    More about this item

    Keywords

    ;
    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jsusta:v:16:y:2024:i:14:p:5902-:d:1432803. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.