Abstract
This study examines the impact of the 2018 "environmental protection fee to tax" policy on the charitable giving of polluting firms between 2015 and 2019 using a differences-in-differences method. This study found that implementing the "environmental protection fee to tax" policy reduced the level of charitable giving by polluters. The decline in charitable-giving levels was more pronounced among firms classified as heavy polluters, firms from the East of China, and non-state firms. The results suggest that the "environmental protection fee to tax" policy cannot only encourage firms to become more environmentally conscious but can also be used to determine the motivations behind firm charitable donations. The policy of changing environmental protection fees to taxes needs to be effectively implemented in China and strengthen the implementation effect.This study enriches the literature on environmental policies and firm charitable giving and provides empirical evidence on the economic consequences of the "environmental protection fee to tax" policy. It can also help polluters and regulators to understand the "environmental protection fee better to tax" policy and help the government to improve the external systems that regulate and guide corporate social responsibility.