Environmental protection tax law, executives’ green cognition and corporate ESG performance: the moderating role of media attention

This study is based on the Environmental Protection Tax Law (EPTL) which came into effect in China in 2018. Using the difference-in-differences method, this paper investigates the influence mechanism of the EPTL on the environmental, social and governance (ESG) performance of firms, with a sample including Chinese A-share listed companies from 2014 to 2024. The research shows that the EPTL has greatly improved the ESG performance of the firms. Furthermore, the positive effect of the EPTL on corporate ESG performance is more pronounced among large-scale and non-manufacturing firms. The mediation analysis results indicate that the EPTL can enhance and transform executive green cognition, encouraging firms to reorganize their resources and increase environmental protection investments. In addition, this research also finds that media attention exerts reputation-driven incentives, thereby positively moderating the promotional effect of the EPTL on corporate ESG performance. This study offers both a theoretical basis and empirical evidence for the implementation and enhancement of China’s environmental tax policies.