Driving green innovation: assessing the impact of environmental tax policies and green finance on heavily polluting industries
Social Transformations in Chinese Societies
ISSN: 1871-2673
Article publication date: 3 December 2024
Abstract
Purpose
The purpose of this paper assess the impact of the green finance pilot reform on corporate green innovation, leveraging the establishment of the China green finance pilot reform in 2018 as a quasi-natural experiment.
Design/methodology/approach
This study investigates the effects of environmental policies on green innovation, utilising a substantial data set from Chinese A-share listed firms over the 2015–2019 period. Employing both double and triple difference models, it focuses on how tax reforms influence green patent filings among these firms.
Findings
The study confirms that environmental tax policies and green finance initiatives significantly boost green patent filings in pollution-intensive industries. Findings from the regression analysis show robust positive effects from these policies, supporting the idea that stringent environmental regulations can spur innovation by offsetting regulatory costs. Financial health indicators like asset logs and return on assets positively correlated with innovation, emphasising the importance of financial stability. In addition, increased RandD spending is linked to enhanced green innovation, highlighting that financial investment in research is crucial for overcoming innovation barriers. These insights are crucial for shaping policies that integrate sustainability into corporate practices.
Originality/value
This research contributes to the literature by highlighting traditional views on the economic burden of environmental taxes and demonstrating their role as significant drivers of innovation. It deepens insights into strategically optimising fiscal tools to promote environmentally sustainable economic activities. In addition, it offers a practical framework for policymakers to improve ecological outcomes through effective fiscal strategies.
Keywords
Acknowledgements
The authors would like to express their gratitude to the editor and reviewers of Social Transformations in Chinese Societies for their insightful comments and constructive feedback, which greatly contributed to the improvement of this manuscript.
Funding: The authors declare that no funds were received to support the research, authorship, or publication of this article.
Conflict of interest. The author declares that the research was conducted without any commercial or financial relationships that could be construed as a potential conflict of interest.
Citation
Masoud, N. (2024), "Driving green innovation: assessing the impact of environmental tax policies and green finance on heavily polluting industries", Social Transformations in Chinese Societies, Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/STICS-08-2024-0013
Publisher
:Emerald Publishing Limited
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