Abstract
Climate change, natural resource depletion, and pollution have a major impact on the environment, social and economy for current and future generations. Green tax policy is designed not only to preserve the environment but also to motivate green growth activities among companies, individuals, and communities. However, the green tax policy in Malaysia is based on tax incentives only and not tax penalty. There is evidence that shows that the incentives based are not fully aware and not being part of companies’ strategies for environmental sustainability. Thus, the need for environmental practices in the manufacturing firms, particularly in the area of green tax, is becoming crucial. Previous studies found that coercive, mimetic, and normative pressures influence the implementation of green practices, but still in doubt whether the pressures also influence the acceptance of the green tax. This study applied the Institutional Theory to explore and explain the role of institutional pressures (coercive, mimetic, and normative pressures) in the development of a green tax acceptance model across the manufacturing firm. If the proposed green tax acceptance framework is validated, the findings will provide important insight to policymakers, practitioners, academicians, tax authorities, and other regulatory authorities in policy formulations and evaluation. Specifically, the findings will contribute to the development of the green tax policy model, mainly on the penalty-based tax reform and eventually increasing tax revenues and enhancing awareness of the green growth environment.
Highlights
Environmental problems such as climate change, pollution, and depletion of public pool resources are commonly understood to be rooted in social dilemmas and lack of collective action
Studies on the explanatory factors of public support for environmental policies, or willingness to pay for environmental protection, typically find that people who value or care about the environment and who are generally concerned about environmental problems, and those who generally support government intervention, are more likely to support basic environmental measures (McCright et al, 2014)
As highlighted in the literature, climate change, natural resource depletion, and pollution have a major impact on the environment, social and economy for current and future generations
Summary
Environmental problems such as climate change, pollution, and depletion of public pool resources are commonly understood to be rooted in social dilemmas and lack of collective action. The study presents a review of the related literature, including institutional theory, coercive pressure, normative pressure, mimetic pressure, and green tax acceptance. They analysed data from China’s top 100 public listed companies and revealed that normative and coercive pressure have significant positive effects on corporate green innovation They claimed that the media should play a larger role to increase public concern about environmental issues. Martinez-Ferrero and Garcia-Sanchez (2017) examined the effect of institutional factors on the likelihood that a firm will report assured sustainability information They found that companies operating in countries that have a greater legal system and cultural development, especially in industries that are greatly concerned about sustainability, are more likely to issue an assurance statement. Coercive pressure stems from political influences and the problem of legitimacy; mimetic pressure resulting from standard response to uncertainty; and normative pressure, associated with professionalisation
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