The effects of tax policies on corporate green practices: differences in effects depending on the industry targeted and the behavior promoted

Tax policies might be written to incentivize companies to reduce their environmental impact. Scientific research has addressed the extent and conditions in which taxes and subsidies actually determine such corporate behaviors. Using a Preferred Reporting Items for Systematic Reviews and Meta-Analyses approach, the current article reports a systematic literature review of 132 articles that investigate the influence of tax instruments on different corporate behaviors in various industries. The findings offer two main contributions with regard to applications of tax policy to alter organizational behavior and benefit the environment. First, reflecting the different effects across tax instruments, the authors identify four moderators of their influence on companies’ environmental impacts: level of taxation, external factors, adverse effects of tax instruments, and conflicting public policy goals. With a better understanding of these moderating influences, policymakers can allocate limited public resources across industries to maximize the results attained with any set public expenditure. Second, the analysis reveals six topics that require further research, which can apply the key moderating factors to other industries and corporate behaviors. This research agenda also encourages scholars to conduct research in industries with significant impacts on the environment but that currently have attracted insufficient research attention.

Affiliations

UCLouvainSSH/LouRIM - Louvain Research Institute in Management and Organizations

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De Boe, G., Swaen, V., & Lamensch, M. (2023). The effects of tax policies on corporate green practices: differences in effects depending on the industry targeted and the behavior promoted (Louvain Research Institute in Management and Organizations Working Paper Series 2023/03). https://hdl.handle.net/2078.5/246743