Study On The Impact Of Environmental Protection Fee To Tax Policy On The Financialization Of Enterprises

In the 21st century,China’s rapid economic development has also caused serious environmental pollution problems,and environmental protection tax,as a new member added to China’s local taxation system,has received wide attention from all walks of life.At the same time,the instability of the market economy has led to a major challenge for China’s real economy,while the increasing maturity of China’s financial market has led to a rising trend in the investment yield of financial investments,which has attracted more and more enterprises to increase the proportion of financial investments in their investment allocations,ultimately leading to a serious"de-realization to deficiency" problem in China’s economy."The problem of The financialization of enterprises,as the expression of financialization at the micro level,has become a hot topic of discussion in today’s society.China’s 14 th Five-Year Plan proposes to support the development of China’s real economy by improving the institutional mechanism,while also emphasizing the need to accelerate the construction of China’s local taxation system.The policy of changing environmental protection fees to taxes is not only a major breakthrough in the reform of China’s local taxation system,but also an important constraint and incentive mechanism for environmental protection tax itself,which is of great significance in solving the problem of financialization of enterprises in China.Therefore,it is important to evaluate the environmental protection fee-to-tax policy and explore the impact of the environmental protection fee-to-tax policy on the financialization of enterprises for the development of China’s real economy.This paper adopts a microscopic approach to evaluate the effect of environmental protection fee and tax reform policy on the financialization of enterprises by examining the impact of environmental protection fee and tax reform policy on the financialization of enterprises.The results of the study successfully test the effects of the environmental protection fee-to-tax policy,which can help the government to establish a sound environmental taxation system in China on the one hand,and help enterprises to use environmental regulation tools to reduce their financialization on the other.Firstly,this paper compares the existing literature and summarizes the various factors influencing the financialization of enterprises from both micro and macro perspectives,and examines the mechanism and channels of influence of the environmental protection fee-to-tax policy on the financialization of enterprises according to the existing research.Secondly,after addressing the differences in the sensitivity of different types of enterprises to environmental protection fee and tax reform policies,this paper selects the listed enterprises in Shanghai and Shenzhen A-shares in China from 2015 to 2020 as the research sample,builds a double difference model for regression analysis,and takes the heavily polluting enterprises that are sensitive to policy reform as the experimental group for regression analysis,while the non-heavily polluting enterprises that are not sensitive enough to policy reform as the control group.The results of the regression analysis show that the environmental protection fee reform is the most important factor for the study.The regression results show that the policy of changing environmental protection fees and taxes can significantly reduce the financialization of enterprises.In the suppression of financialization,the financing constraint plays a part in mediating the effect of the tax reform policy.Further,we find that the suppression of financialization of non-state enterprises and small-scale enterprises is more significant.Finally,this paper provides insights on how to reduce the financialization of enterprises in the context of environmental protection fee reform and the reform direction of China’s environmental protection tax system,hoping to help establish a sound environmental protection tax system and achieve steady progress in China’s economic construction.