The Impact of Tax Reduction Incentives on Corporate Green Transformation: Evidence From Chinese Listed Companies

This study examines the impact of tax reduction incentives (TRIs) on the green transformation (GT) of Chinese A‐share listed companies between 2008 and 2022. Our findings indicate that these incentives effectively encourage firms to adopt greener practices, a conclusion supported by robustness checks and endogeneity tests. The transformative effect is primarily driven by increased risk‐taking, enhanced research and development (R&D) expenditure, and increased green investment (GI). Furthermore, the influence of TRIs is more pronounced in companies with high information transparency, those operating outside heavily polluting industries, and large‐scale enterprises. The study also offers policy recommendations to bolster GT and the effective implementation of tax incentives in China, based on insights drawn from both theoretical and empirical analyses.