The Reform Of Environmental Protection Fee-to-Tax And Its Impact On Corporate Green Technology Innovation

The 20 th National Congress of the Communist Party of China put forward that highquality development is the first and foremost task of the overall construction of a civilized,modern socialist country,and at the same time explicitly recommended that environmental pollution be thoroughly promoted and prevented,that the new philosophy of development be implemented,and that the path of ecological priority,green and low-carbon development be firmly pursued.China’s economic shift to a high-quality development phase has created challenges for the development of the corporates.High-quality development requires the companies to reduce pollution emissions and green their production,while promoting green technology innovation is a key move for the companies to achieve green transformation and development.The early economic development came at the cost of the environmental pollution and the increasing clashes between this growing economic development and the pollution of the environment have led to an unprecedented concern for environmental protection in China.In the light of this,since the emission charging system was introduced in 1982,China has continuously reformed it and,in order to guide enterprises to follow a green and sustainable development path.From 1 January 2018,the Law of the People’s Republic of China on Environmental Protection Tax came into effect,with corresponding adjustments to the collection of sewage charges,from the collection of sewage charges to the imposition of environmental protection tax.This reform is regarded as an initiative to promote green and sustainable development of enterprises and is an important push-back mechanism to achieve green technological innovation in enterprises.This thesis employs the formal implementation of the 2018 environmental protection feeto-tax policy as a quasi-natural experiment,chooses A-share quoted corporations from 2011-2020 as the research sample,and adopts the generally popular double difference method to empirically test the effect of the implementation of China’s environmental protection fee-to-tax policy on corporate green technological innovation,using the changes in corporate environmental tax burden criteria before and after the policy implementation as the grouping basis.The results of the empirical analysis show that:(1)the implementation of the environmental protection fee-to-tax policy has a remarkable positive relationship with the corporate level of green technology innovation,which indicates that the government can force corporate green technology innovation to improve through the environmental protection fee-totax policy.(2)After the inclusion of corporate R&D investment,the coefficient of correlation of green technology innovation decreases due to the change in environmental fees to taxes,but the change in environmental fees and taxes still contributes significantly and positively to the improvement of corporate green technology innovation,which demonstrates that,in the process of executing the policy of environmental fee tax change,corporate R&D investment plays the role of a mediator variable in the effect of green technology innovation between companies and environmental fee tax change.The correlation coefficient and significance of environmental fee tax change on corporate green technology innovation are maintained after the addition of the financing constraint,however,the correlation coefficient of financing constraint on corporate green technology innovation is estimated to be-0.149,which is significantly negative at the 5%level.This indicates that greater financing constraints are detrimental to corporate green technology innovation.This suggests that the introduction of the environmental fee-to-tax policy decreases the corporate financing constraint,which in turn boosts the corporate innovation in green technology,i.e.The mitigation of the financing constraint is the intermediary variable for the improvement of the corporate green technology innovation by the environmental fee-to-tax policy.(3)Analysis based on enterprise size,industry pollution intensity,and enterprise ownership grouping found that the implementation of the environmental fee-to-tax policy had a more significant impact on large-scale corporations,heavily polluting corporations,and state-owned corporations in terms of green technology innovation.(4)A further analysis of the influence of the environmental protection fee to tax change on the quality of green technology innovation of corporations shows that the implementation of the environmental protection fee to tax change policy has a significant contribution to the quality of green technology innovation of corporations.Further analysis of the moderating effect of tax administration shows that the increase in the intensity of tax administration significantly enhances the correlation between environmental protection fees to taxes change and the level of green technological innovation of enterprises.The environmental protection tax is the first tax specifically established for environmental protection in China,and has a long-term effect on corporate pollution control and green technological innovation.The policy recommendations in this thesis are as follows: the government should further optimize and perfect the details of the implementation of the environmental protection tax system to create a favorable tax business environment;corporations should strengthen their investment in research and development,nurture their employees’ innovation awareness;the government should increase its tax collection and administration efforts to optimize China’s tax collection and administration system;and policies should develop a differentiated environmental protection initiative to precisely Position the demand of corporations.This thesis provides empirical evidence on the implementation effect of environmental protection tax at the micro-enterprise level,which is conducive to enriching the literature on environmental protection fee-to-tax issues,providing a theoretical basis and foundation for subsequent policy implementation,and has important implications for further improving environmental protection fee-to-tax policies and promoting green technological innovation among enterprises.