Environmental Protection Tax and Firms’ ESG Investment: Evidence from China

Does environmental protection tax (EPT) improve firms’ environmental governance performance? Previous studies ignore that EPT affects firms' environmental governance behavior by increasing discharge and non-compliance costs. To fill this gap, we estimate the impact of EPT on firms' environmental, social, and governance (ESG) investments using Chinese listed firms during 2013-2020. we propose two key hypothesises: "Hypothesis 1A. EPT increases the firm’s green-producing and green-responsibility investment" and "Hypothesis 1B. EPT improves the quality of a firm’s environmental information disclosure". We estimate the impact of EPT on firms' environmental, social, and governance (ESG) investments using Chinese listed firms during 2013-2020. To evaluate firms’ ESG activities, we construct specific E, S, and G indicators relating to the environment, including the firm’s green-producing investment, green responsibility investment, and environmental information disclosure, which highlight the key impact of EPT on firms’ environmental governance. The three dimensions (E, S, and G) of ESG are often considered independent in most studies. but they can be relevant on an environmental level, reflecting the different ways in which corporate environmental governance is conducted. EPT is measured at the firm level using pollution discharge fees from 2013 to 2017 and pollution discharge taxes from 2018 to 2020. We find that EPT significantly forces firms to engage in more ESG activities after controlling for firm characteristics, firm-level, and year-level fixed effects. Our findings are robust to IV approaches, Heckman Correction, panel Generalized Method of Moments (GMM) estimations, an alternative EPT measure (EPT standards at the prefecture-level city), and ESG measures (ESG scores from a third party), as well as a group test. We also investigate the channel through which EPT boosts firms' ESG activities. One is an increasing tax payment as polluting discharges increase. The other is the ex-post noncompliance cost because EPT imposes strict penalties on violators, it includes illegal costs, negotiation costs, and litigation costs. We find that EPT has a positive impact on ESG in firms with greater cost pressure, which is measured by highly polluting industries and experiences with environmental controversy. Furthermore, we find that the ESG improvements are more significant in firms that are privately controlled, located in areas with sound environmental protection justice, and have weaker competitiveness.

环境保护税（Environmental Protection Tax, EPT）能否提升企业环境治理绩效？既往研究忽视了环境保护税通过提升排污成本与违规成本，影响企业环境治理行为这一关键路径。为填补这一研究空白，本文以2013-2020年中国A股上市公司为样本，评估环境保护税对企业环境、社会和公司治理（Environmental, Social and Governance, ESG）投资的影响，并提出两个核心假说：“假说1A：环境保护税能够提升企业绿色生产与绿色责任投资水平”；“假说1B：环境保护税能够改善企业环境信息披露质量”。为精准刻画企业ESG活动表现，本文构建了针对环境（E）、社会（S）、治理（G）三个维度的专属指标体系，涵盖企业绿色生产投资、绿色责任投资与环境信息披露三大核心内容，以凸显环境保护税对企业环境治理的关键作用。现有多数研究往往将ESG的三大维度视为相互独立的部分，但在环境层面三者存在内在关联，共同体现了企业环境治理的不同实现路径。本文以企业层面的排污费（2013-2017年）与环境保护税（2018-2020年）作为EPT的代理变量。实证结果表明，在控制企业特征、企业层面与年度层面固定效应后，环境保护税能够显著推动企业开展更多ESG相关活动。本文通过工具变量（Instrumental Variable, IV）法、赫克曼修正、面板广义矩估计（Generalized Method of Moments, GMM）、替换环境保护税代理变量（采用地级市层面环境保护税标准）、更换ESG衡量指标（采用第三方ESG评分）以及分组检验等多种方法进行稳健性检验，结果均证实上述结论稳健可靠。本文进一步探究了环境保护税推动企业ESG活动的作用路径：其一，随着排污量增加，企业纳税额上升；其二，事后违规成本提升——环境保护税对违规企业施以严格处罚，该类成本包括违法成本、协商成本与诉讼成本。研究发现，在高污染行业以及曾遭遇环境争议的企业中，这类面临更高成本压力的企业，环境保护税对其ESG表现的正向提升作用更为显著。此外，本文还发现，在民营企业、环保司法体系完善地区的企业以及竞争力较弱的企业中，环境保护税对ESG表现的改善效果更为突出。