The impact of environmental fees to taxes on total factor productivity of manufacturing enterprises: empirical evidence from China
Balancing environmental benefits with economic gains is a crucial challenge for developing countries striving for sustainable development in today’s context. On January 1, 2018, China transitioned from a sewage charge system to an environmental protection tax (EPT). This shift aims to determine whet...
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| Format: | Article |
| Language: | English |
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IOP Publishing
2025-01-01
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| Series: | Environmental Research Communications |
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| Online Access: | https://doi.org/10.1088/2515-7620/adaf0e |
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| author | Jing Huang Zhaoyang Zhao Xinjing Yang Yuhang Tian |
| author_facet | Jing Huang Zhaoyang Zhao Xinjing Yang Yuhang Tian |
| author_sort | Jing Huang |
| collection | DOAJ |
| description | Balancing environmental benefits with economic gains is a crucial challenge for developing countries striving for sustainable development in today’s context. On January 1, 2018, China transitioned from a sewage charge system to an environmental protection tax (EPT). This shift aims to determine whether it can incentivize businesses to enhance quality and efficiency, thereby achieving high-quality development while ensuring that both environmental and economic interests can thrive together. This paper examines the transition from environmental protection fees to tax (TEPFT) as a quasi-natural experiment. Utilizing microdata from A-share listed companies between 2013 and 2022, it focuses on manufacturing enterprises-characterized by high inputs, consumption, and pollution-as the experimental group. In contrast, non-manufacturing enterprises in the cleaning industry serve as the control group. Employing both difference-in-differences (DID) and triple-difference models, the study empirically analyzes the impact of the environmental protection fee tax change on the total factor productivity (TFP) of manufacturing firms. The findings indicate that: (1) TEPFT can significantly increase TFP of manufacturing firms by 4.9%. (2) this improvement in TFP is primarily driven by increased technological innovation within manufacturing enterprises. Additionally, while effective management practices have a positive moderating effect, financing constraints hinder this progress. (3) the impact of the TEPFT on TFP is particularly pronounced in state-owned enterprises and in provinces where tax rates are elevated. |
| format | Article |
| id | doaj-art-093ac79307174673b45af38fb2aea176 |
| institution | Kabale University |
| issn | 2515-7620 |
| language | English |
| publishDate | 2025-01-01 |
| publisher | IOP Publishing |
| record_format | Article |
| series | Environmental Research Communications |
| spelling | doaj-art-093ac79307174673b45af38fb2aea1762025-02-06T17:04:49ZengIOP PublishingEnvironmental Research Communications2515-76202025-01-017202500610.1088/2515-7620/adaf0eThe impact of environmental fees to taxes on total factor productivity of manufacturing enterprises: empirical evidence from ChinaJing Huang0Zhaoyang Zhao1https://orcid.org/0000-0002-0548-7511Xinjing Yang2Yuhang Tian3School of Public Administration , Sichuan University, Chengdu 610065, People’s Republic of ChinaSchool of Public Administration , Sichuan University, Chengdu 610065, People’s Republic of ChinaSchool of Public Administration , Sichuan University, Chengdu 610065, People’s Republic of ChinaBusiness School, Sichuan University , Chengdu 610065, People’s Republic of ChinaBalancing environmental benefits with economic gains is a crucial challenge for developing countries striving for sustainable development in today’s context. On January 1, 2018, China transitioned from a sewage charge system to an environmental protection tax (EPT). This shift aims to determine whether it can incentivize businesses to enhance quality and efficiency, thereby achieving high-quality development while ensuring that both environmental and economic interests can thrive together. This paper examines the transition from environmental protection fees to tax (TEPFT) as a quasi-natural experiment. Utilizing microdata from A-share listed companies between 2013 and 2022, it focuses on manufacturing enterprises-characterized by high inputs, consumption, and pollution-as the experimental group. In contrast, non-manufacturing enterprises in the cleaning industry serve as the control group. Employing both difference-in-differences (DID) and triple-difference models, the study empirically analyzes the impact of the environmental protection fee tax change on the total factor productivity (TFP) of manufacturing firms. The findings indicate that: (1) TEPFT can significantly increase TFP of manufacturing firms by 4.9%. (2) this improvement in TFP is primarily driven by increased technological innovation within manufacturing enterprises. Additionally, while effective management practices have a positive moderating effect, financing constraints hinder this progress. (3) the impact of the TEPFT on TFP is particularly pronounced in state-owned enterprises and in provinces where tax rates are elevated.https://doi.org/10.1088/2515-7620/adaf0etotal factor productivityenvironmental protection taxmanufacturing enterprisestechnological innovation |
| spellingShingle | Jing Huang Zhaoyang Zhao Xinjing Yang Yuhang Tian The impact of environmental fees to taxes on total factor productivity of manufacturing enterprises: empirical evidence from China Environmental Research Communications total factor productivity environmental protection tax manufacturing enterprises technological innovation |
| title | The impact of environmental fees to taxes on total factor productivity of manufacturing enterprises: empirical evidence from China |
| title_full | The impact of environmental fees to taxes on total factor productivity of manufacturing enterprises: empirical evidence from China |
| title_fullStr | The impact of environmental fees to taxes on total factor productivity of manufacturing enterprises: empirical evidence from China |
| title_full_unstemmed | The impact of environmental fees to taxes on total factor productivity of manufacturing enterprises: empirical evidence from China |
| title_short | The impact of environmental fees to taxes on total factor productivity of manufacturing enterprises: empirical evidence from China |
| title_sort | impact of environmental fees to taxes on total factor productivity of manufacturing enterprises empirical evidence from china |
| topic | total factor productivity environmental protection tax manufacturing enterprises technological innovation |
| url | https://doi.org/10.1088/2515-7620/adaf0e |
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