Incentive or Distortion? The Influence of Tax Burden on Corporate Green Innovation Bubbles

Based on the resource-based view, this study examines how corporate tax burden influences green innovation bubbles using a panel of Chinese A-share listed firms from 2009 to 2020. The results show that a higher tax burden significantly amplifies such bubbles—a finding that remains robust across system GMM estimation, propensity score matching, alternative variable specifications, and subsample analyses. Mechanism analysis indicates that tax burden undermines substantive green innovation through three pathways: resource crowding-out, resource substitution, and erosion of innovation efficiency. Furthermore, heterogeneity tests reveal that the effect is stronger in non-SOEs and in firms with severe financing constraints, underscoring the role of ownership structure and financial conditions in shaping how firms respond innovatively to tax pressure.