Assessing the impact of green tax reforms on corporate environmental performance and economic growth: do green reforms promote the environmental performance in heavily polluted enterprises?

Based on Porter's hypothesis and Pollution Shelter's hypothesis, this paper firstly constructs a mechanism of environmental protection tax law and corporate environmental performance. Secondly, it empirically examines the impact of green tax reform on corporate environmental performance and its internal mechanism through the difference in difference (DID) method. The study findings firstly reveal that environmental protection tax law significantly and progressively promotes the improvement of corporate environmental performance. Secondly, the heterogeneity analysis results show that the promotion effect of environmental protection tax law on corporate environmental performance is significant in enterprises with strong financial constraints and stronger internal transparency. The environmental performance improvement effect of the state-owned enterprises is stronger, which indicates that state-owned enterprises can set an example in the face of the formal implementation of the environmental protection tax law. In addition, the heterogeneity of corporate governance shows that the background of senior executives is an important factor affecting the effect of environmental performance improvement. Thirdly, the mechanism analysis indicates that the environmental protection tax law mainly promotes the improvement of enterprise environmental performance by strengthening the local government's enforcement rigidity, improving the local government's environmental concern, promoting enterprise green innovation, and resolving the collusion between government and enterprise. Further analysis shows that the environmental protection tax law based on the empirical results of this paper did not significantly trigger the phenomenon of cross-regional negative pollution transfer of enterprises. The findings of the study have important enlightenment on improving the green governance of enterprises and promoting the high-quality development of national economy.

Comprehending the environmental regulation, biased policies and OFDI reverse technology spillover effects: a contingent and dynamic perspective.

Technology spillovers have the substantial effect on the industrial structure in emerging economies especially from OFDI (Outward Foreign Direct Investment). This research aims to examines the issue on how environmental regulation and biased policies can more effectively promote the OFDI reverse technology spillover effect, specifically the technology spillovers. By classifying the key industries mentioned in the '12th Five-Year Plan' and '13th Five-Year Plan', this research uses panel data from 2010 to 2019 obtained from provincial OFDI in China and utilizes difference in difference (DID) model and threshold regression approach to validate the analysis. The results show that the key industrial policy is favorable to the local OFDI reverse technology spillover. From the outlook of economic significance, the industrial policy increases the regional OFDI reverse technology spillover by 0.133%. Findings of our study further reveals that the environmental regulation and biased policy effectively promote the regional OFDI reverse technology spillover with certain stability. This study findings will be beneficial for policy makers to stimulate the reverse technology spillover impact of local OFDI more effectively from three aspects such as regional marketization level, innovation ability and financial structure.

Heterogeneous impacts of environmental regulation on foreign direct investment: do environmental regulation affect FDI decisions?

The industry selection effect occurring from the impact of environmental regulation on foreign direct investment (FDI) in China is heterogeneous. Based on the extended game theory model, and by using panel data of 35 Chinese industries from 2005 to 2014, this study constructs a system of simultaneous equations to explore the dynamic effect of environmental regulation on FDI in terms of industry selection decisions. Specifically, three-stage least square analysis method (3SLS) of simultaneous equations is utilized to check robustness of the results under different standards. Results reveal that environmental regulation promotes the technological innovation within the Chinese industry and attract larger foreign capital investment. While the influx of capital further boosts the technological progress, a benign interaction effect was observed between the technological innovation and foreign investment. Findings of our study show that the policy of market borrowing technology is more effective, and the implementation of the new environmental policy will intensify the strategies between managers and enterprises. Results of our study show a positive interaction between R&D funding and foreign capital flows. Enhanced coordination activity within industrial organizations will generate more effective organizational and technological innovation, and attract a large flow of FDI. In addition, industry sample results highlight that a compensation effect of technological innovation in the raw materials and manufacturing industry, though environmental regulation of high-tech industries will generate a balance effect with respect to technological innovation. The government should emphasize on the enhancement of execution and effectiveness of environmental regulation, enhancing FDI and enlightening the synergistic possessions of environmental regulation and FDI.