The impact of big data tax administration on corporate ESG—A quasi-natural experiment based on Golden Tax Project III

Abstract

Environmental, social and governance (ESG) practices are pivotal to global sustainability yet face challenges. Based on the implementation of Golden Tax Project III, we find that big data tax administration decreases corporate ESG performance. Mechanism tests indicate that Golden Tax Project III can reduce tax avoidance, cash flow and green innovation, thereby inhibiting ESG through the “taxation effect.” Conversely, the project can reduce agency costs and improve information transparency, thus promoting ESG performance through the “governance effect.” Overall, however, the project inhibits corporate ESG performance. According to further analysis, the negative effect on ESG performance mainly impacts the environmental responsibility (E) element. This paper provides insights relevant to advancing China’s “dual carbon” policy and formulating a “Chinese approach” to global sustainable development.