How does environmental protection tax affect corporate technological innovation? - Perspective of corporate governance

This study examines the effects of China's Environmental Protection Tax (EPT) on technological innovation in heavily polluting industries across taxed provinces from 2013 to 2021, focusing on the influence of executives' green cognition. The dataset comprises 14,582 observations from 1,276 listed companies in the China Stock Market & Accounting Research Database. The results of regression analyses, using the difference-in-differences and triple-differences methods, reveal that the EPT positively affects technological innovation within enterprises. This effect is particularly pronounced in heavily polluting industries and provinces where tax amounts have been adjusted. Notably, the effects are more significant in non-state-owned enterprises and in firms where the roles of chairman and general manager are separate. These findings demonstrate the effectiveness of environmental policies in promoting technological advancement and offer vital insights for the development of future policy measures.