Venture capital, green innovation, and corporate tax reduction

This study takes Chinese A-share listed companies from 2013 to 2023 as the research sample to empirically examine the relationship between green innovation and corporate tax reduction, as well as the regulatory role of venture capital in this mechanism. The results indicate that: First, corporate green innovation input exerts a significant positive effect on tax reduction. Second, the tax reduction effect of green innovation shows obvious heterogeneity depending on the corporate tax burden level. Third, in terms of external organizational characteristics, the tax reduction effect of green innovation is more significant in enterprises with high industry competition intensity and high social responsibility performance. Fourth, venture capital participation plays a positive moderating role in the process of green innovation promoting corporate tax reduction; specifically, the involvement of venture capital strengthens the tax reduction effect brought by green innovation. Fifth, the moderating effect of venture capital is heterogeneous in enterprises with different financialization degrees, and it is more significant in highly financialized enterprises, while it has no obvious regulatory impact in low-financialized enterprises.