China's environmental fee-to-tax policy and green innovation in advanced manufacturing: Evidence from a quasi-natural experiment.

Abstract

This study uses the implementation of the Environmental Fee-to-Tax Policies (EFTT) as a quasi-natural experiment to investigate its impact on green technology innovation (GTI) in the advanced manufacturing sector. Drawing on data from A-share listed firms in Shanghai and Shenzhen spanning 2011 to 2022, we apply a difference-in-differences (DID) method within this quasi-experimental setting. The results show the policy significantly boosts GTI. This effect is reinforced by local government subsidies, industry competition, media scrutiny, and executives' commitment to environmental goals. Crucially, we identify significant three-way interactions involving media attention: both the interactions of government subsidies with media attention, and industry competition with media attention, exhibit moderated moderating effects on the policy's impact. Heterogeneity analysis reveals that high-tech firms, companies in eastern regions, and those in resource-poor areas respond more strongly. These findings offer robust evidence from a quasi-natural experiment perspective. They provide valuable guidance for corporate green transformation strategies and inform the design of environmentally integrated tax reforms.