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RETRACTED ARTICLE: Can the greening of the tax system improve enterprises’ ESG performance? Evidence from China

Author

Listed:
  • Caiyun Lin

    (Yunnan University)

  • Shibao Lu

    (Yun Nan University)

  • Xuyang Su

    (Yunnan University)

  • Chuanhao Wen

    (Yunnan University)

Abstract

Can the greening of the tax system truly drive high-quality development of enterprises? ESG, as an investment concept and evaluation criterion focusing on corporate sustainable development, is an essential tool for enterprises to practice high-quality economic development. Based on this, using China’s environmental protection tax reform in 2018 as a natural experiment, this paper examines the impact and transmission paths of environmental protection tax on enterprises’ ESG performance from the unique dual perspectives of external attention and internal decision-making, adopting a diference-in-differences (DID) approach. The study finds that, firstly, environmental protection tax significantly improves enterprises’ ESG levels through the internal level of green innovation and external public environmental concerns. Moreover, the level of internal governance and external analyst attention play a positive moderating role in this process. Secondly, the improvement effect of environmental protection tax on enterprises’ ESG performance is more significant for manufacturing enterprises, non-state-owned enterprises, financially resource-rich enterprises, and enterprises located in regions with higher economic growth, lower government-market linkage, and better legal environment. This research responds to the fundamental question of whether the greening of the tax system can truly promote high-quality development of enterprises, and provides valuable insight into how to further enhance the promoting role of environmental protection tax on enterprises’ ESG performance.

Suggested Citation

  • Caiyun Lin & Shibao Lu & Xuyang Su & Chuanhao Wen, 2024. "RETRACTED ARTICLE: Can the greening of the tax system improve enterprises’ ESG performance? Evidence from China," Economic Change and Restructuring, Springer, vol. 57(3), pages 1-32, June.
    • Handle: RePEc:kap:ecopln:v:57:y:2024:i:3:d:10.1007_s10644-024-09687-w
    DOI: 10.1007/s10644-024-09687-w
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    References listed on IDEAS

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    Cited by:

    1. Peng, Shengnan & Liu, Chan & Wang, Ze & Ye, Zihan & Sun, Xialing & Tan, Zhanglu, 2024. "The impact of the carbon reduction policy effectiveness on energy companies' ESG performance," International Review of Financial Analysis, Elsevier, vol. 96(PB).
    2. Xiaoxia Jia & Weiyi Guang, 2024. "Can Innovation Improve Corporate ESG Performance? The Moderating Effect of Internal and External Incentives," Sustainability, MDPI, vol. 16(15), pages 1-21, August.
    3. Yuegang Song & Ziqi Wang & Yuzhen Yang, 2024. "The green transformation effect of foreign patent applications in China: evidence from Chinese manufacturing enterprises," Economic Change and Restructuring, Springer, vol. 57(6), pages 1-44, December.
    4. Ma, Yisen & Song, Caixia, 2025. "The impact of ESG on firms’ export technology complexity," Finance Research Letters, Elsevier, vol. 72(C).

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