PBESProceedings of Business and Economic Studies2209-26412209-265XBio-Byword Scientific Publishing Pty. Ltd.10.26689/pbes.v7i6.9149ArticleImpact of Environmental Protection Tax on Enterprise Capital-Labor Allocation in the Context of High-Quality Economic Developmenthttps://artdesignp.com/journal/PBES/7/6/10.26689/pbes.v7i6.9149ChenZujie,WangMengjia,ZhangChaoqiang2024762024-12-23Using a double-difference model, this paper examines the impact of the 2018 Environmental Protection Tax Law of the People’s Republic of China on the capital-labor ratio of A-share listed enterprises in China. The results indicate that the implementation of the environmental protection tax significantly increases the capital-labor ratio of firms, leading to a preference for capital-intensive production. The mediating role of total factor productivity (TFP) in this process suggests that the environmental protection tax enhances the capital-labor ratio by fostering TFP growth. Heterogeneity analysis reveals that the effect of the environmental protection tax on the capital-labor ratio is more pronounced in economically developed regions, state-owned enterprises, and enterprises with a longer operational history.

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