Valuation Impacts of Environmental Protection Taxes and Regulatory Costs in Heavy-Polluting Industries
Autor(a) principal: | |
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Data de Publicação: | 2020 |
Outros Autores: | , , |
Tipo de documento: | Artigo |
Idioma: | eng |
Título da fonte: | Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) |
Texto Completo: | http://hdl.handle.net/10400.22/19330 |
Resumo: | In 2016, the issue of the Environmental Protection Tax Law indicated the enhancement of environmental protection in China. This study examines the market reaction to firms in heavy-polluting industries, and the effects of external legal institutional quality and internal environmental disclosure on firm value around the passage of Environmental Protection Tax Law. Using an event study approach coupled with ordinary least square regressions, the researchers find a significantly negative market reaction to firms in heavy-polluting industries, but this negative reaction varies depending on the expected increase in future regulatory costs. Specifically, the above negative reaction is stronger when the firm reveals that itself or its subsidiary belongs to heavy-polluting industry, however it would be mitigated when a firm is in a region with better quality of legal institutions or discloses environmental improvement activities. Overall, the results are consistent with the market perceiving that the environmental protection tax law enacted would increase regulatory costs for firms in heavy-polluting industries, and also show the higher-quality regional legal institutions and more efforts on environmental protection could relieve the market’s pessimism caused by uncertainty. |
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Valuation Impacts of Environmental Protection Taxes and Regulatory Costs in Heavy-Polluting IndustriesEnvironmental protection taxMarket investor responseRegulatory costsEnvironmental disclosureRegional legal institutionsChinaIn 2016, the issue of the Environmental Protection Tax Law indicated the enhancement of environmental protection in China. This study examines the market reaction to firms in heavy-polluting industries, and the effects of external legal institutional quality and internal environmental disclosure on firm value around the passage of Environmental Protection Tax Law. Using an event study approach coupled with ordinary least square regressions, the researchers find a significantly negative market reaction to firms in heavy-polluting industries, but this negative reaction varies depending on the expected increase in future regulatory costs. Specifically, the above negative reaction is stronger when the firm reveals that itself or its subsidiary belongs to heavy-polluting industry, however it would be mitigated when a firm is in a region with better quality of legal institutions or discloses environmental improvement activities. Overall, the results are consistent with the market perceiving that the environmental protection tax law enacted would increase regulatory costs for firms in heavy-polluting industries, and also show the higher-quality regional legal institutions and more efforts on environmental protection could relieve the market’s pessimism caused by uncertainty.his research was sponsored by Ministry of Education of Humanities and Social Science Project (grant number: 19JYC630158) and K.C.Wong Magna Fund in Ningbo University.MDPIRepositório Científico do Instituto Politécnico do PortoTu, Wen-JunYue, Xiao-GuangLiu, WeiCrabbe, M. James C.2022-01-06T11:02:05Z20202020-01-01T00:00:00Zinfo:eu-repo/semantics/publishedVersioninfo:eu-repo/semantics/articleapplication/pdfhttp://hdl.handle.net/10400.22/19330eng10.3390/ijerph17062070info:eu-repo/semantics/openAccessreponame:Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)instname:Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informaçãoinstacron:RCAAP2023-03-13T13:13:27Zoai:recipp.ipp.pt:10400.22/19330Portal AgregadorONGhttps://www.rcaap.pt/oai/openaireopendoar:71602024-03-19T17:39:22.828682Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) - Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informaçãofalse |
dc.title.none.fl_str_mv |
Valuation Impacts of Environmental Protection Taxes and Regulatory Costs in Heavy-Polluting Industries |
title |
Valuation Impacts of Environmental Protection Taxes and Regulatory Costs in Heavy-Polluting Industries |
spellingShingle |
Valuation Impacts of Environmental Protection Taxes and Regulatory Costs in Heavy-Polluting Industries Tu, Wen-Jun Environmental protection tax Market investor response Regulatory costs Environmental disclosure Regional legal institutions China |
title_short |
Valuation Impacts of Environmental Protection Taxes and Regulatory Costs in Heavy-Polluting Industries |
title_full |
Valuation Impacts of Environmental Protection Taxes and Regulatory Costs in Heavy-Polluting Industries |
title_fullStr |
Valuation Impacts of Environmental Protection Taxes and Regulatory Costs in Heavy-Polluting Industries |
title_full_unstemmed |
Valuation Impacts of Environmental Protection Taxes and Regulatory Costs in Heavy-Polluting Industries |
title_sort |
Valuation Impacts of Environmental Protection Taxes and Regulatory Costs in Heavy-Polluting Industries |
author |
Tu, Wen-Jun |
author_facet |
Tu, Wen-Jun Yue, Xiao-Guang Liu, Wei Crabbe, M. James C. |
author_role |
author |
author2 |
Yue, Xiao-Guang Liu, Wei Crabbe, M. James C. |
author2_role |
author author author |
dc.contributor.none.fl_str_mv |
Repositório Científico do Instituto Politécnico do Porto |
dc.contributor.author.fl_str_mv |
Tu, Wen-Jun Yue, Xiao-Guang Liu, Wei Crabbe, M. James C. |
dc.subject.por.fl_str_mv |
Environmental protection tax Market investor response Regulatory costs Environmental disclosure Regional legal institutions China |
topic |
Environmental protection tax Market investor response Regulatory costs Environmental disclosure Regional legal institutions China |
description |
In 2016, the issue of the Environmental Protection Tax Law indicated the enhancement of environmental protection in China. This study examines the market reaction to firms in heavy-polluting industries, and the effects of external legal institutional quality and internal environmental disclosure on firm value around the passage of Environmental Protection Tax Law. Using an event study approach coupled with ordinary least square regressions, the researchers find a significantly negative market reaction to firms in heavy-polluting industries, but this negative reaction varies depending on the expected increase in future regulatory costs. Specifically, the above negative reaction is stronger when the firm reveals that itself or its subsidiary belongs to heavy-polluting industry, however it would be mitigated when a firm is in a region with better quality of legal institutions or discloses environmental improvement activities. Overall, the results are consistent with the market perceiving that the environmental protection tax law enacted would increase regulatory costs for firms in heavy-polluting industries, and also show the higher-quality regional legal institutions and more efforts on environmental protection could relieve the market’s pessimism caused by uncertainty. |
publishDate |
2020 |
dc.date.none.fl_str_mv |
2020 2020-01-01T00:00:00Z 2022-01-06T11:02:05Z |
dc.type.status.fl_str_mv |
info:eu-repo/semantics/publishedVersion |
dc.type.driver.fl_str_mv |
info:eu-repo/semantics/article |
format |
article |
status_str |
publishedVersion |
dc.identifier.uri.fl_str_mv |
http://hdl.handle.net/10400.22/19330 |
url |
http://hdl.handle.net/10400.22/19330 |
dc.language.iso.fl_str_mv |
eng |
language |
eng |
dc.relation.none.fl_str_mv |
10.3390/ijerph17062070 |
dc.rights.driver.fl_str_mv |
info:eu-repo/semantics/openAccess |
eu_rights_str_mv |
openAccess |
dc.format.none.fl_str_mv |
application/pdf |
dc.publisher.none.fl_str_mv |
MDPI |
publisher.none.fl_str_mv |
MDPI |
dc.source.none.fl_str_mv |
reponame:Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) instname:Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informação instacron:RCAAP |
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Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informação |
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RCAAP |
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RCAAP |
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Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) |
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Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) |
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Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) - Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informação |
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