“Does water resource taxation improve firm productivity and regional ecological performance? Evidence from China” (2026), by Yake Wei et al. Business and Management research paper. Original abstract below, unchanged. A free PDF is available.

Does water resource taxation improve firm productivity and regional ecological performance? Evidence from China

Yake Wei, Yang Wang · October 27, 2026 · Business and Management

Abstract

Introduction Water scarcity is increasingly constraining global sustainable development, making it a critical policy challenge to improve economic performance while strengthening resource conservation. Methods Using the 2018 expansion of China’s Water Resource Tax Pilot Policy (WRTP) as a quasi-natural experiment, this study applies a difference-in-differences approach to firm-level and county-level data from 2012 to 2022. Results The results show that the WRTP significantly improves the total factor productivity of water-intensive firms, particularly in cities with stronger industrial foundations, the Yangtze River Economic Belt, regions with relatively abundant water resources, and larger listed firms. Environmental performance disclosure strengthens this productivity effect. Green innovation and pollution treatment disclosure exhibit significant positive moderating effects, whereas environmental supervision disclosure does not exhibit a significant moderating effect. County-level evidence further shows that the WRTP reduces water consumption intensity and the area affected by soil erosion while increasing sewage treatment capacity and investment in wastewater treatment. Discussion Overall, water resource taxation improves firm productivity while enhancing regional ecological performance, providing policy insights for advancing sustainable water governance in resource-constrained economies.

Free PDF DOI: 10.3389/fenvs.2026.1965461