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.