دانلود رایگان مقاله انگلیسی تأثیر مشوق های مالیاتی سرمایه گذاری: اصلاح مالیات بر ارزش افزوده چین - اشپرینگر 2018

Abstract

We estimate the impact of investment tax credit on firm fixed investment in a difference-in-differences-in-differences framework, using China’s 2004 valueadded tax reform pilot that introduces a permanent 17%-tax credit for fixed investment in six industries in the Northeastern region. The tax credit raises significantly fixed investment of eligible firms by 28% on average during 2004–2007 relative to 2001– 2003, corresponding to a user cost elasticity of 1.84. The tax incentive has larger effects on firms that are less financially constrained such as smaller firms and firms with a larger cash flow. The result is largely driven by responses of domestic private firms and is robust to specifications addressing the issue of anticipation.

7 Conclusion

To facilitate the transition of economic growth from one of labor-driven to one where technology plays a more important role, the Chinese government launched an important tax reform in the mid 2000s—the conversion of the value-added tax from one of production type to consumption type—as an effort to provide more incentives to firms to invest in new equipment that may embody new technologies. This paper estimates the impact on firm fixed investment of the investment tax credit provided by China’s 2004 VAT reform pilot. We find that the tax credit has a positive and significant impact on the fixed investment expenditure of eligible firms. Our heterogeneity analyses suggest that the investment tax incentive has larger effects on firms that are less financially constrained such as smaller firms and firms with a larger cash flow. The finding that domestic private firms respond significantly to the tax incentives is partially due to their large cash flow; it also suggests that our results have broader implications for policy making in countries at similar development stages.

We interpret our estimates as the effect of tax credit on the investment of eligible firms, and they provide useful insights into possible impacts of the nationwide expansion of the VAT reform in 2009. Yet, one should exercise caution in drawing quantitative implications for national reforms from the estimates here. For example, investment may shift from ineligible to eligible regions or from ineligible to eligible industries under a partial reform, which is not possible in a national reform. The supply-side response may also be quite different in a national reform from a local experiment.

Given that we find in this paper that VAT reform has induced more investment of eligible firms, future research will investigate whether this increased investment has translated into higher productivity. In addition, future research will also examine the composition of the newly purchased investment goods: Do they embody more advanced technologies? This will provide additional insights into the mechanisms of productivity gains and economic growth.