Environmental protection tax on enterprise environmental, social and governance performance: A multi-perspective analysis based on financing constraints
{"title":"Environmental protection tax on enterprise environmental, social and governance performance: A multi-perspective analysis based on financing constraints","authors":"Ailan Liu , Sijia Dai , Zhixuan Wang","doi":"10.1016/j.asieco.2023.101671","DOIUrl":null,"url":null,"abstract":"<div><p>This article fills the research gaps of existing studies on the mechanism between environmental policy and corporate performance in environmental, social, and governance (ESG). The study finds that implementing environmental protection tax can improve the ESG performance of heavily polluting firms. By examining the mediating effects of factors based on financing constraints, the study further explores the link between environmental protection tax introduction and ESG performance of companies. In addition, the heterogeneity analysis in terms of tax preference, total operating cost, and monopoly power, shows that heavily polluting firms with higher tax preferences, higher total operating costs, or weaker monopoly power are more likely to enhance their performance on ESG issues after introducing the environmental tax. This research provides essential theoretical and practical implications for revealing the connection that exists between environmental tax policy and the sustainability of companies.</p></div>","PeriodicalId":47583,"journal":{"name":"Journal of Asian Economics","volume":null,"pages":null},"PeriodicalIF":2.9000,"publicationDate":"2023-11-03","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Journal of Asian Economics","FirstCategoryId":"96","ListUrlMain":"https://www.sciencedirect.com/science/article/pii/S104900782300091X","RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q1","JCRName":"ECONOMICS","Score":null,"Total":0}
引用次数: 0
Abstract
This article fills the research gaps of existing studies on the mechanism between environmental policy and corporate performance in environmental, social, and governance (ESG). The study finds that implementing environmental protection tax can improve the ESG performance of heavily polluting firms. By examining the mediating effects of factors based on financing constraints, the study further explores the link between environmental protection tax introduction and ESG performance of companies. In addition, the heterogeneity analysis in terms of tax preference, total operating cost, and monopoly power, shows that heavily polluting firms with higher tax preferences, higher total operating costs, or weaker monopoly power are more likely to enhance their performance on ESG issues after introducing the environmental tax. This research provides essential theoretical and practical implications for revealing the connection that exists between environmental tax policy and the sustainability of companies.
期刊介绍:
The Journal of Asian Economics provides a forum for publication of increasingly growing research in Asian economic studies and a unique forum for continental Asian economic studies with focus on (i) special studies in adaptive innovation paradigms in Asian economic regimes, (ii) studies relative to unique dimensions of Asian economic development paradigm, as they are investigated by researchers, (iii) comparative studies of development paradigms in other developing continents, Latin America and Africa, (iv) the emerging new pattern of comparative advantages between Asian countries and the United States and North America.