The Effect of Environmental Tax on Corporate Green Innovation: Incremental Quality Improvement in the Carbon Emission Trading Market
- 1 School of Accounting, Hangzhou Dianzi University, Hangzhou, China
* Author to whom correspondence should be addressed.
Abstract
This study examines how environmental tax influences corporate green technological innovation, with a particular focus on “incremental quality improvement.” Using empirical data from A-share listed companies in Shanghai and Shenzhen spanning from 2018 to 2022, the research controls for key variables such as company size and total debt ratio. The analysis explores the direct relationship between environmental tax and corporate innovation in green technologies. In addition, it considers the moderating role of carbon emission trading market policies in shaping this relationship. The findings indicate that environmental tax plays a crucial role in fostering incremental improvements in the quality of green technological innovation, primarily through innovation compensation mechanisms and the effect of compliance costs. More specifically, a 1% increase in environmental tax correlates with a notable rise of 3.132 units in the number of green technological innovations, as well as an increase of 2.848 units in their quality. The study further reveals that in regions where carbon emission trading policies are active, the positive influence of environmental taxes on green innovation is significantly amplified. These results provide valuable insights for enhancing environmental tax strategies and reinforcing the integration between carbon emission trading markets and environmental taxation. Such synergies can help drive corporate innovation in green technologies and contribute to the achievement of broader sustainable development goals.
Keywords
Environmental Tax, Green Technological Innovation, Carbon Emission Trading Market
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Cite this article
Huang,J. (2025). The Effect of Environmental Tax on Corporate Green Innovation: Incremental Quality Improvement in the Carbon Emission Trading Market. Advances in Economics, Management and Political Sciences,175,157-164.
Data availability
The datasets used and/or analyzed during the current study will be available from the authors upon reasonable request.
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