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Environmental protection tax and the labor income share of companies: evidence from a quasi-natural experiment in China by Qian Xiao; Yaohui Jiang; Rong Li; Sidi Xiao is a Environmental Science article available to read on EtoBox.

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There is no conclusion on whether green development can symbiotically coexist with shared development, and the effect of environmental protection tax on labor share provides new evidence to answer this question. This paper presents a theoretical analysis of change in labor share in the exogenous impact of the enforcement of the Environmental Protection Tax Law of China, and proposes relevant hypotheses. At the same time, empirical data of listed firms on the main board from 2013 to 2019 are collected. A difference-in-differences model is constructed to test the hypotheses empirically. The study found that the reform of environmental protection fee to tax reduced the labor share of high-polluting firms by an average of about 1.43%. However, it did not significantly reduce the share of corporate executives' income. The reform of environmental protection fee to tax reduces the labor share of high-polluting firms through the crowding-out effect and the substitution effect of production technology. The heterogeneity study revealed that the reform of environmental protection fee to tax has more substantial negative impacts on firms with high financing constraints, low market concerns, an

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Author

Qian Xiao; Yaohui Jiang; Rong Li; Sidi Xiao

Publisher

Springer Science and Business Media LLC

Published

2023

Language

EN

Field

Environmental Science (Physical Sciences)