The impact of export VAT rebates on firm productivity: Evidence from China

Bao-qing, Tang; Bo, Gao; Ma, Jing

doi:10.1111/twec.13076

Cited by 9 publications

(5 citation statements)

References 56 publications

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“…In our data, most of firms do not spend on R&D. Mean value of R&D is 0.0041.The reason behind low investment in R&D is that the Pakistani firms normally do not invest in R&D activities. Tang, Gao and Ma (2019) have also documented that most of firms do not incur R&D expenditures. Mean value of the leverage is 0.632 with SD of 0.409 a similar finding is also reported for Pakistani firm level data by Mahmud and Qayyum (2003).…”

Section: Descriptive Statisticsmentioning

confidence: 99%

Impact of Volatility on Firm Sales Growth Some Insights from Pakistan

Rauf¹,

Rashid²

2021

BER

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This paper empirically investigates how firm level, industrial level, market level and macroeconomic volatilities influencePakistani non-financial firms’ sales growth. It also examines how interactions between different kinds of volatilities affect sales growth. The empirical analysis is carried out using unbalanced annual panel data set covering the period 1988-2017.The results indicate that although all types of volatilities assert negative impacts, the intensity of the impact is quite different across different volatilities. Macroeconomic volatility has the highest adverse impact followed by firm volatility. Unexpectedly, the results provide evidence that one type of volatility significantly reduces the adverse impact of other type of volatility. These findings imply that firms may design and implement more effective sales growth strategies in periods when they face more than on type of volatility.

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Section: Descriptive Statisticsmentioning

confidence: 99%

Impact of Volatility on Firm Sales Growth Some Insights from Pakistan

Rauf¹,

Rashid²

2021

BER

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“…The object of the VAT input refund or rebate is the remained VAT input tax for the deduction, which has been promoted by IMF and is popular in countries adopting VAT recently. Higher VAT refunds significantly raised firm productivity [ 8 ]. The residual VAT input tax is formed due to policy reasons such as multiple tax rates, inversions of tax rates or price, as well as business reasons such as the time lag between VAT output and input taxes, seasonal factors, and market mismatches [ 9 , 10 ].…”

Section: Literature Reviewmentioning

confidence: 99%

China’s value-added tax policy and intertemporal optimal assets allocation of enterprises——Based on the dual perspectives of VAT input refund and VAT rate

Liu

2023

PLoS ONE

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The article sought to detect the impact of the value-added tax (VAT) policy on the enterprises’ asset allocation from the dual perspectives of the VAT input refund and the VAT rate. Based on the influenced mechanism of the VAT input refund and the tax burden effect (and the price effect) caused by the VAT rate, enterprises’ intertemporal optimal asset allocation models are constructed under the states of adopting the VAT input refund and maintaining the theoretical tax (non-)neutrality of VAT. When VAT rates of the general taxpayers are predicted to be reduced, we also use China’s manufacturing and economic data to simulate specific cases to verify propositions under different states. The results show that: (1) When the VAT output tax rate decreases: if returns to scale are diminishing, enterprises will increase the number of productive material assets and labor and reduce financial assets. (2) When the VAT input tax rate reduces: under the state of adopting the VAT input refund and maintaining the theoretical tax (non-)neutrality of VAT, if returns to scale are decreasing, enterprises will reduce the number of productive material assets and labor and increase financial assets. Under the state of adopting the VAT input refund and maintaining the theoretical tax neutrality of VAT, if returns to scale are increasing and the expected rate of return of financial assets is lower than the additional tax rate, or the enterprise has diminishing returns to scale and the expected rate of return of financial assets is higher than the additional tax rate, enterprises will increase the number of productive material assets and labor. (3) When VAT output and input tax rates reduce simultaneously: under the state of adopting the VAT input refund and maintaining the theoretical tax neutrality of VAT, if returns to scale are increasing and the expected return rate of financial assets is higher than the additional tax rate, the enterprise will reduce the number of productive material assets and labor and increase financial assets. Under the diminishing returns to scale in China’s national economy, the research conclusions endorse the rational necessity of the VAT policy change—VAT rate reduction to develop the entity economy and provide a reference for enterprises to make asset allocation decisions. The conclusions also provide possible changes in VAT policy for different countries according to their actual economic conditions.

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“…Khandelwal [4] first explained the portion of the product market share that was not subject to price changes, which laid the foundation for the measurement of product quality at the macro level. Based on the quality measurement at the enterprise level, Fan and Guo [5] estimated the regression model in Khandelwal et al [6] by using the elasticity of substitution of export products measured by Broda and Weinstein [7], and measured the quality of Chinese enterprises' export products. From the perspective of consumer utility maximization, Shi [8] and Shi and Zeng [9] measured the quality of Chinese enterprises' import and export products from 2000 to 2006 by means of a regressive method.…”

Section: Detailed Literature Reviewmentioning

confidence: 99%

“…This, however, would result in a large loss of samples, reduced sample representativeness, and generality of conclusions. Thus, we refer to the method of Fan and Guo [5] and construct the following quality measurement model:…”

Section: The Quality Of Newly Imported Products Measured By Fan and G...mentioning

confidence: 99%

“…Since China's accession to the World Trade Organization (WTO), disregarding the impact of the global financial crisis in 2008 and the contraction of trade after the global economic slowdown in 2015, its total annual import volume has been on the rise. Numerous studies have been conducted on the positive effect of import trade on economic development and technological progress [1][2][3][4][5][6][7][8][9][10][11][12][13][14]. On the other hand, the import trade provides diversified product choices for enterprises, and increasing the variety of imported products is an important way to promote the productivity level of enterprises and enhance independent innovation [7,15,16].…”

Section: Introductionmentioning

confidence: 99%

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The Influence of Quality and Variety of New Imports on Enterprise Innovation: Evidence from China

2020

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In this study, we introduce the concept of differentiated quality inputs with knowledge-driven specifications for research and development (R&D) under an open economy to the endogenous growth model of knowledge spillover. Using matching industry enterprise and customs data from 2001 to 2007, which is representative of micro data at the Chinese industry level, we theoretically analyze the influence of the quality and variety of imported products on Chinese enterprises’ innovation and economic growth. We find that, first, the improvement of the quality and variety of new imported products can promote enterprise innovation. Second, new imported intermediate inputs and capital goods, new imported high-technology products, and products imported from Organization for Economic Co-operation and Development (OECD) countries have stronger promoting effects on enterprise innovation. We conclude that imported products stimulate the growth of the economy through two channels: expanding the variety and increasing the quality of inputs. To verify the stability of our model, we conducted robustness tests by defining new imported products based on a base year, measuring enterprise innovation by the number of patent applications, and measuring the quality of new imported products in a new way.

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The impact of export VAT rebates on firm productivity: Evidence from China

Cited by 9 publications

References 56 publications

Impact of Volatility on Firm Sales Growth Some Insights from Pakistan

Impact of Volatility on Firm Sales Growth Some Insights from Pakistan

China’s value-added tax policy and intertemporal optimal assets allocation of enterprises——Based on the dual perspectives of VAT input refund and VAT rate

The Influence of Quality and Variety of New Imports on Enterprise Innovation: Evidence from China

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