IDEAS home Printed from https://ideas.repec.org/a/bla/irvfin/v25y2025i1ne12460.html
   My bibliography  Save this article

Environmental protection tax and trade credit: Evidence from China

Author

Listed:
  • Xueyao Lu
  • Lin Cheng
  • Yuhao Niu

Abstract

This study investigates how the introduction of China's Environmental Protection Tax Law impacts firms' trade credit taking Chinese A‐share listed companies from 2013 to 2020 as the research sample. Since introducing the Environmental Protection Tax Law, the trade credit of pollution‐intensive firms has increased significantly. Following the mechanism test, the environmental fee‐to‐tax reform forces firms to improve their green innovation level and reduce their risk of environmental violations, which protects the suppliers' interests and increases the willingness of suppliers to provide trade credit for these firms. Further analysis shows that when the firm's market power is relatively higher, the regional judicial environment is better, the regional intensity of tax collection is higher and the effect of environmental fee‐to‐tax reform on the firm's trade credit is strong. Our results contribute to the literature regarding the impact of environmental regulations on firms from the perspective of trade credit, and we provide a new perspective and empirical evidence to support Porter's win‐win hypothesis further.

Suggested Citation

  • Xueyao Lu & Lin Cheng & Yuhao Niu, 2025. "Environmental protection tax and trade credit: Evidence from China," International Review of Finance, International Review of Finance Ltd., vol. 25(1), March.
    • Handle: RePEc:bla:irvfin:v:25:y:2025:i:1:n:e12460
    DOI: 10.1111/irfi.12460
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/irfi.12460
    Download Restriction: no
    File URL: https://libkey.io/10.1111/irfi.12460?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:irvfin:v:25:y:2025:i:1:n:e12460. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://www.blackwellpublishing.com/journal.asp?ref=1369-412X .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.