Abstract
This paper examines the effect of China's High-Tech Enterprise certification policy on firm-level carbon emissions, with particular attention to firms' strategic responses to the R&D intensity requirement. We combine data from the China Industrial Enterprise Database, the National Tax Survey Database, and high-resolution spatial carbon emissions data to construct firm-level carbon emission measures within a 1 km radius. Using bunching analysis, we find a significant concentration of firms just above the statutory R&D intensity threshold, indicating that some firms strategically adjust their reported R&D expenditure to obtain preferential tax treatment. We then apply a bunching-based difference-in-differences approach to examine how such behavior affects the environmental outcome of the policy. The results show that firms within the bunching interval achieve little reduction in carbon emissions, while firms outside the interval experience a significant decline. Green innovation is the main channel through which tax incentives reduce emissions, but this channel is absent among strategic responders. We also find that non-strategic high-tech enterprises achieve both better economic performance and lower carbon emissions. These findings show that the environmental benefits of fiscal incentives depend strongly on firms' actual innovation activities and provide important implications for the design and enforcement of green industrial policies.
Zhang, H.; Wang, Z.; Huang, K.; Chen, X.; Du, J.; Song, M. 2026. Fiscal incentives, strategic responses, and carbon emissions: Evidence from China's high-tech enterprise certification policy. Journal of environmental management : Academic press. ISSN 0301-4797. eISSN 1095-8630. 418, 131087, p. 1–14. DOI: 10.1016/j.jenvman.2026.131087. [Scopus; Science Citation Index Expanded (Web of Science)]