The rollout of China’s Environmental Protection Tax Law (EPTL) represents an important step in encouraging the growth of green technology innovation. This study explores how the EPTL influences green technological innovation, as well as the channels through which these effects occur. It also examines how these impacts differ across firms with different ownership structures and varying levels of environmental protection awareness (EPA). The research findings suggest that the EPTL plays a clear role in encouraging pollution-intensive enterprises to engage more in green technological innovation. The effect is more pronounced for green innovations with lower technological complexity. Mechanism analysis reveals that enterprise cost pressure, increased R&D investment, and government support serve as the primary channels driving this effect. In addition, the positive impact is especially strong among state-owned firms and companies with higher levels of EPA. For this reason, the government should continue to strengthen the practice of the EPTL and provide more targeted policy support for heterogeneous pollution-intensive enterprises.
Wang et al. (Thu,) studied this question.