Real-Time Local Air Quality Monitoring and Corporate Tax Avoidance

The phased rollout of air quality monitoring stations in China is used as a quasi-natural experiment. A staggered difference-in-differences approach reveals an inhibitory effect that real-time monitoring significantly curtails corporate tax avoidance, driven by three mutually reinforcing mechanisms. The system heightens regulatory pressure by facilitating cross-agency audits and increases transparency that elevates reputational risks among stakeholders. Furthermore, rent-seeking opportunities are reduced by effectively constraining official discretion. The deterrent effect is more pronounced for large, high-visibility firms, those with strong bank-firm ties, and in regions facing high government debt or severe pollution. These findings reveal how digital environmental governance fosters fiscal integrity, and provide essential guidance for regulatory coordination, green credit assessment, and corporate transparency strategies.