The impact of tax reform on corporate green transformation — Evidence based on the value-added tax retained rebate

Abstract

This paper empirically investigates the tax system reform as an important factor driving corporate green transformation. Empirical results indicate that government's implementation of a tax system reform, mainly based on the value-added tax (VAT) retained rebate, can significantly enhance the level of corporate green innovation and promote corporate green transformation. Further research reveals that the promoting effect of the tax system reform on corporate green transformation is more pronounced in non-state-owned enterprises and in companies with high financing constraints. Overall, the research results have significant practical implications for further improving corporate resource allocation and fostering new competitive advantages for companies.