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Export tax rebate and the margins of exports: product-level evidence from a quasi-natural experiment

Author

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  • Wonkyung Lee

    (Tsinghua University)

  • Hong Ma

    (Tsinghua University)

  • Yuan Xu

    (Tsinghua University)

Abstract

This paper examines the effect of export value-added tax (VAT) rebate policy on the margins of exports in terms of export value, quantity and price. Treating the VAT rebate adjustment implemented in July 2007 as a quasi-natural experiment, we find that a reduction in the export VAT rebate rate has significantly reduced export value and quantity with an incomplete pass-through to export price. The estimated responses to the rebate are generally higher than those to exchange rate fluctuations and comparable to those to tariff changes.

Suggested Citation

  • Wonkyung Lee & Hong Ma & Yuan Xu, 2021. "Export tax rebate and the margins of exports: product-level evidence from a quasi-natural experiment," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 28(2), pages 386-404, April.
    • Handle: RePEc:kap:itaxpf:v:28:y:2021:i:2:d:10.1007_s10797-020-09633-2
    DOI: 10.1007/s10797-020-09633-2
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    References listed on IDEAS

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    Cited by:

    1. Bingqiang Li & Xi Li & Jinzhi Li & Hongchun Lin & Baojuan Rui, 2023. "Empirical Analysis of Export Tax Rebate on Inwards Foreign Direct Investment in China," SAGE Open, , vol. 13(4), pages 21582440231, December.
    2. Lu, Bing & Ma, Hong, 2023. "The “Matthew effect” in rebates: How does VAT rebates allocation affect firm export performance," Journal of Public Economics, Elsevier, vol. 225(C).
    3. Xu, Zhiwei & Wen, Qiang & Zhang, Teng, 2023. "Trade policy and air pollution: Evidence from the adjustment of the export tax rebate in China," Economic Modelling, Elsevier, vol. 128(C).

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    More about this item

    Keywords

    VAT rebate; Export margins; China;
    All these keywords.

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade

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