ORIGINAL RESEARCH article
Front. Environ. Sci.
Sec. Environmental Economics and Management
How does the water resources tax affect the sustainable green innovation of water-intensive industrial enterprises?
Provisionally accepted
Xia Xing
Tang Honglan*- 太原科技大学经济与管理学院, 太原市, China
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The sustained engagement of water-intensive industrial enterprises in green innovation plays a crucial role in promoting the development of the water-saving industry and fostering a water-conserving society. However, the practical effectiveness of the water resource tax—an essential policy instrument for advancing water ecological civilization—in fostering sustainable green innovation among these enterprises remains unclear. This study employs a difference-in-differences (DID) approach with panel data from Chinese A-share listed industrial enterprises spanning 2012 to 2022 to examine the impact of the water resource tax reform on these firms' sustainable green innovation and its underlying mechanisms. The reform serves as a quasi-natural experiment. The findings indicate that the water resource tax significantly enhances sustainable green innovation among these enterprises. Mechanism analysis reveals that the tax stimulates innovation by easing financing constraints and attracting green investment. Furthermore, the environmental awareness of managers amplifies the positive effects of the tax. Notably, the positive effect of the tax on sustained green innovation is more pronounced among state-owned enterprises, large firms, water-intensive enterprises located in eastern regions, and high-tech enterprises.
Keywords: Water resources tax, Water-intensive industrial enterprises, Sustainable green innovation, Green investors, Management environmental awareness
Received: 19 Aug 2025; Accepted: 13 Nov 2025.
Copyright: © 2025 Xing and Honglan. This is an open-access article distributed under the terms of the Creative Commons Attribution License (CC BY). The use, distribution or reproduction in other forums is permitted, provided the original author(s) or licensor are credited and that the original publication in this journal is cited, in accordance with accepted academic practice. No use, distribution or reproduction is permitted which does not comply with these terms.
* Correspondence: Tang Honglan, s202316110660@stu.tyust.edu.cn
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