Is Corporate Taxation Bad for the Environment? An Empirical Analysis of the Association between State-Level Taxation and Corporate Environmental Performance

I investigate the impact of statutory tax rates on U.S. firms' environmental performance. Prior literature emphasizes the effect of manager influence on the relation between tax avoidance and environmental activities. However, it is unclear how taxes imposed on a firm impact environmental performance. Firms subject to higher statutory tax rates experience more restricted cash flows. As such, higher statutory tax rates may limit managers' ability to address environmental concerns. Firms that experience higher statutory tax rates may not prioritize environmental efforts, which are often non-essential to a firm's operations, despite government incentives. Alternatively, higher tax rates may encourage firms to address environmental concerns due to the tax shield that these expenses provide and the relatively lower cost to shareholders. Observing tax rate variation at the state level, I find higher state tax rates are associated with weaker environmental performance. My study contributes to regulators' understanding of the interaction between tax policy and firms' abilities to address their environmental impact.

Name thesis:degree_name

Doctor of Philosophy

Level thesis:degree_level

doctoral

Discipline thesis:degree_discipline

Business, Accounting and Information Systems

Department dc:contributor.department

Business, Accounting and Information Systems

Grantor dc:publisher

Virginia Tech

Year dc:date.issued

2024

Author dc:creator

• Meersman, James Elliot

Chairs dc:contributor.committeechair

• Davidson, Robert H.
• Acito, Andrew A.

Committee members dc:contributor.committeemember

• Chakravarti, Dipankar
• Lisic, Ling Lei

• Environmental Performance
• Statutory Corporate Income Tax Rates
• Environmental Legislation
• Corporate Social Responsibility

Statement dc:rights

• In Copyright

Licence dc:rights.uri

• http://rightsstatements.org/vocab/InC/1.0/

Language dc:language.iso

en

Dc Identifier Other

vt_gsexam:41189

OAI identifier oai:identifier

oai:vtechworks.lib.vt.edu:10919/120624