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Water Resource Tax and Green Industrial Development: Reform from the Largest Emerging Economy

Author

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  • Haiyan Lu

    (School of Accountancy, Lanzhou University of Finance and Economics, Lanzhou 730020, China
    Institute for the Realization of the Value of Ecological Products, Lanzhou University of Finance and Economics, Lanzhou 730020, China)

  • Yongxin Zhu

    (School of Accountancy, Lanzhou University of Finance and Economics, Lanzhou 730020, China)

  • Yongqing Kang

    (School of Accountancy, Lanzhou University of Finance and Economics, Lanzhou 730020, China)

Abstract

The global challenge of water resource management presents a policy dilemma: while water resource tax aims to foster green development, it may hinder the economic potential of micro entities. This paper evaluates the efficacy of a trial of water resource tax reform in China regarding the green total factor productivity of listed Chinese industrial enterprises over the period spanning 2012–2019 by employing a quasi-natural experiment. This study utilizes multi-period Difference-in-Differences (DID) and propensity score matching methodologies to deal with the self-selection bias inherent in choosing pilot areas. The findings illustrate that the reform exerted a crucial beneficial impact on the GTFP of industrial enterprises. The main takeaway of this study is that the phased reform, integrating water resource taxes with the adaptation of micro entities, offers a pathway for economies to balance resource restrictions with sustainable development.

Suggested Citation

  • Haiyan Lu & Yongxin Zhu & Yongqing Kang, 2025. "Water Resource Tax and Green Industrial Development: Reform from the Largest Emerging Economy," Sustainability, MDPI, vol. 17(10), pages 1-20, May.
    • Handle: RePEc:gam:jsusta:v:17:y:2025:i:10:p:4478-:d:1655817
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