Impact of Environmental Protection Tax on Enterprise Capital-Labor Allocation in the Context of High-Quality Economic Development
Year: 2024
Type: article
Abstract: Using a double-difference model, this paper examines the impact of the 2018 Environmental Protection Tax Law of the People’s Republic of China on the capital-labor ratio of A-share listed enterprises in China. The results indicate that the implementation of the environmental protection tax significantly increases the capital-labor ratio of firms, leading to a preference for capital-intensive production. The mediating role of total factor productivity (TFP) in this process suggests that the environmental protection tax enhances the capital-labor ratio by fostering TFP growth. Heterogeneity analysis reveals that the effect of the environmental protection tax on the capital-labor ratio is more pronounced in economically developed regions, state-owned enterprises, and enterprises with a longer operational history.
Authors: Zujie Chen, Mengjia Wang, Chaoqiang Zhang
Institution: Wuhan University of Technology
Language: English
Subfield: Economics and Econometrics
Domain: Social Sciences
Open Access status: diamond
OpenAlex ID: W4405698497