Environmental Tax Incentives and Corporate Environmental Behaviour: An Unintended Consequence from a Natural Experiment in China
Résumé
Using the implementation of the Environmental Protection Tax (EPT) Law in China as a natural experiment, we explore the impact of environmental tax incentives on corporate environmental engagement. Evidence shows that, after the implementation of the EPT Law, there exists a significant improvement in the environmental performance of firms located in regions with increased EPT rates. However, our results reveal an unintended consequence that this effect is more salient for nonheavy-polluting companies rather than for heavy polluters that are more targeted by the EPT Law. \textcopyright 2023 John Wiley & Sons Ltd.