{"title":"Regulatory effects of environmental protection tax law on corporate practices in China","authors":"Dan Xu , Cuihua Wu","doi":"10.1016/j.frl.2024.106469","DOIUrl":null,"url":null,"abstract":"<div><div>This study focuses on the regulatory effects of China's Environmental Protection Tax Law (EPTL) on corporate practices. Furthermore, it examines the impact of this tax law on firm financial performance mediated by firm environmental, social, and governance (ESG) performance and firm innovation. Our findings indicate that the EPTL positively influences financial outcomes, with ESG and innovation as critical intermediaries. Recommendations include refining the EPTL by providing increased incentives for firms to adopt ESG practices and invest in innovation, fostering a stronger alignment between environmental legal frameworks and corporate behavior.</div></div>","PeriodicalId":12167,"journal":{"name":"Finance Research Letters","volume":"71 ","pages":"Article 106469"},"PeriodicalIF":7.4000,"publicationDate":"2024-11-13","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Finance Research Letters","FirstCategoryId":"96","ListUrlMain":"https://www.sciencedirect.com/science/article/pii/S1544612324014983","RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q1","JCRName":"BUSINESS, FINANCE","Score":null,"Total":0}
引用次数: 0
Abstract
This study focuses on the regulatory effects of China's Environmental Protection Tax Law (EPTL) on corporate practices. Furthermore, it examines the impact of this tax law on firm financial performance mediated by firm environmental, social, and governance (ESG) performance and firm innovation. Our findings indicate that the EPTL positively influences financial outcomes, with ESG and innovation as critical intermediaries. Recommendations include refining the EPTL by providing increased incentives for firms to adopt ESG practices and invest in innovation, fostering a stronger alignment between environmental legal frameworks and corporate behavior.
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