The impact of environmental taxes on economic benefits and technology innovation input of heavily polluting industries in China

Abstract

This paper defined heavily polluting enterprises as the treatment group based on relevant data on the listed companies in the 5 years from 2016 to 2020. Companies other than the heavily polluting enterprises were defined as the control group. An empirical analysis applying the double-difference technique was performed to assess the impact of China’s environmental tax on the economic performance and technological innovation input of industries that pollute heavily. The findings demonstrated an increased positive effects of environmental taxes on the economic performance and technology innovation input of heavily polluting industries since the inception of the environmental tax in China. As some enterprises in heavily polluting industries are under increased financial pressure owing to green upgrades and the low environmental tax rate in some regions, recommendations are presented to improve the environmental regulation system, adapt environmental taxes to local conditions, and strengthen the implementation and supervision of environmental taxes through big data technology.