IDEAS home Printed from https://ideas.repec.org/a/eee/finlet/v65y2024ics1544612324006214.html

The influence of tax incentives on market segmentation in the context of a unified national market

Author

Listed:
  • Liu, Jun
  • Huang, Bihui
  • Hu, Yaoyu

Abstract

The new development pattern prioritises the construction of a unified national market, eliminating market segmentation and promoting resource flows. This paper investigates the impact of tax incentives on market segmentation using China's provincial panel data from 2003 to 2019 through a two-way fixed effects model. The results indicate that tax incentives reduce market segmentation. The analysis of heterogeneity reveals a non-linear relationship between the effects of tax incentives on market segmentation. Tax incentives reduce market segmentation in regions with low tax incentives, but have a limited effect or even exacerbate segmentation in regions with high incentives.

Suggested Citation

  • Liu, Jun & Huang, Bihui & Hu, Yaoyu, 2024. "The influence of tax incentives on market segmentation in the context of a unified national market," Finance Research Letters, Elsevier, vol. 65(C).
    • Handle: RePEc:eee:finlet:v:65:y:2024:i:c:s1544612324006214
    DOI: 10.1016/j.frl.2024.105591
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1544612324006214
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.frl.2024.105591?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    References listed on IDEAS

    as
    1. Yue Cao & Xinyu Hu & Yu Lu & Jun Su, 2020. "Customer Concentration, Tax Collection Intensity, and Corporate Tax Avoidance," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 56(11), pages 2563-2593, September.
    2. T. S. Breusch & A. R. Pagan, 1980. "The Lagrange Multiplier Test and its Applications to Model Specification in Econometrics," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 47(1), pages 239-253.
    3. Zhou, Qianling & Li, Tao & Gong, Liutang, 2022. "The effect of tax incentives on energy intensity: Evidence from China's VAT reform," Energy Economics, Elsevier, vol. 108(C).
    4. Yue Cao & Xinyu Hu & Yu Lu & Jun Su, 2020. "Customer Concentration, Tax Collection Intensity, and Corporate Tax Avoidance," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 56(11), pages 2563-2593, September.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Ji, Dongya & Zhang, Qin & Yu, Siming & Wan, Kang, 2025. "Market concentration construction and high - quality development of enterprises: Empirical evidence from Chinese A - share listed companies," Economic Analysis and Policy, Elsevier, vol. 87(C), pages 621-641.
    2. Hou, Xinshuo & He, Yan & Liu, Xin & Li, Dongyang & Zhang, Shijie, 2025. "Market segmentation and urban energy consumption: An analysis of threshold effects from an agglomeration perspective," Energy Economics, Elsevier, vol. 147(C).
    3. Huo, Xiuzhen & Dong, Yuanyuan, 2025. "From market segmentation to consumption growth: How does digital-real integration strengthen the consumption stimulation effect in a unified national market?," International Review of Economics & Finance, Elsevier, vol. 103(C).
    4. Chaozheng Zhang & Danling Chen & Xupeng Zhang & Xinhai Lu & Jiao Hou & Qingsong He & Jia Li & Yizhen Yin & Chenning Deng, 2025. "Underestimated impacts: the multi-dimensional roles of land finance in driving regional economic integration," Humanities and Social Sciences Communications, Palgrave Macmillan, vol. 12(1), pages 1-17, December.
    5. Li, Lang & Luo, Nengsheng, 2025. "Is market integration conducive to carbon reduction? Evidence from Chinese cities," Economic Analysis and Policy, Elsevier, vol. 87(C), pages 1595-1611.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Wu, Guanzheng & Li, Yang, 2025. "Tax-related information regulatory capacity and accounting information quality," International Review of Financial Analysis, Elsevier, vol. 99(C).
    2. Chang, Zhenghao & Zhou, Hang & Ruan, Mengyu & Li, Qin, 2025. "When major customers matter: customer concentration and ESG rating disagreement," Journal of Contemporary Accounting and Economics, Elsevier, vol. 21(3).
    3. Ebrahim Abbas Abdullah Abbas Amer & Zhang Xiuwu & Ebrahim Mohammed Ali Meyad & Mohammed Muneer Alareqi & SAMEER. M. H. BATHER & Amr Abdelwahed, 2025. "Nexus between renewable-disaggregated non-renewable energy consumption and economic growth in GCC countries: a Cobb-Douglas production function analysis," Humanities and Social Sciences Communications, Palgrave Macmillan, vol. 12(1), pages 1-18, December.
    4. Kizito Uyi Ehigiamusoe & Chien‐Chiang Lee & Hooi Hooi Lean, 2025. "Analysis of the Impact of Economic Policies on Climate Change Mitigation," Sustainable Development, John Wiley & Sons, Ltd., vol. 33(S1), pages 161-181, November.
    5. Gao, Yuan & Li, Jianjun & Wu, Yaping, 2025. "Competition and tax avoidance: Evidence from quasi natural experiment of the implementation of Anti-Trust Law," International Review of Economics & Finance, Elsevier, vol. 98(C).
    6. Umar, Muhammad, 2025. "Does CBDC launch increase tax collection? empirical evidence from China," Finance Research Letters, Elsevier, vol. 71(C).
    7. Zhang, Jian & Wang, Ningzhi & Wu, Wenruo & Zhu, Xinyu, 2025. "Tax information and corporate environmental investment," International Review of Financial Analysis, Elsevier, vol. 97(C).
    8. Chalevas, Constantinos & Ntounis, Dimitrios & Vlismas, Orestes, 2025. "The effect of cost asymmetry on future tax avoidance," Journal of International Accounting, Auditing and Taxation, Elsevier, vol. 58(C).
    9. Ma, Chunguang & Feng, Shunfei & Huang, Wenhui & Chen, Aoyun, 2025. "Political corruption and corporate tax avoidance: A quasi-natural experiment," International Review of Financial Analysis, Elsevier, vol. 99(C).
    10. Huixiang Zeng & Xuemei Li & Zhifang Zhou & Yishuang Ma & Fangting Lv, 2023. "Local gambling culture and corporate tax aggressiveness: A trait activation perspective on informal institutions," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 44(6), pages 3166-3184, September.
    11. Jing, Zhongbo & Zhang, Wei & Zhao, Pengcheng & Zhao, Yang, 2025. "Environmental tax reform and corporate tax avoidance: A quasi-natural experiment on China’s environmental protection tax law," The North American Journal of Economics and Finance, Elsevier, vol. 76(C).
    12. Lv, Wendai & Meng, Qiuchi & Cao, Yuanyuan & Liu, Jiajia, 2025. "Impact and moderating mechanism of corporate tax avoidance on firm value from the perspective of corporate governance," International Review of Financial Analysis, Elsevier, vol. 99(C).
    13. Teklewold, Hailemariam, 2011. "Farming or burning? shadow prices and farmer’s impatience on the allocation of multi-purpose resource in the mixed farming system of Ethiopia," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 116080, European Association of Agricultural Economists.
    14. George S. Chen & Emmanuel Kwaku Manu & Dennis Asante, 2023. "Achieving environmental sustainability in Africa: The role of financial institutions development on carbon emissions," Sustainable Development, John Wiley & Sons, Ltd., vol. 31(5), pages 3272-3290, October.
    15. Michel Krah & Michael Kouadio & Fabrice Anzara, 2026. "Public debt and economic growth in WAEMU countries: evidence on the moderating effect of governance," SN Business & Economics, Springer, vol. 6(3), pages 1-22, March.
    16. Meghamrita Chakraborty, 2023. "Linking Migration, Diversity and Regional Development in India," Journal of Development Policy and Practice, , vol. 8(1), pages 55-72, January.
    17. Hany Eldemerdash & Hugh Metcalf & Sara Maioli, 2014. "Twin deficits: new evidence from a developing (oil vs. non-oil) countries’ perspective," Empirical Economics, Springer, vol. 47(3), pages 825-851, November.
    18. Iheonu O Chimere & Tochukwu Nwachukwu, 2020. "Macroeconomic determinants of household consumption in selected West African countries," Economics Bulletin, AccessEcon, vol. 40(2), pages 1596-1606.
    19. Manuchehr Irandoust, 2019. "Saving and investment causality: implications for financial integration in transition countries of Eastern Europe," International Economics and Economic Policy, Springer, vol. 16(2), pages 397-416, April.
    20. Huy Quang Doan, 2019. "Trade, Institutional Quality and Income: Empirical Evidence for Sub-Saharan Africa," Economies, MDPI, vol. 7(2), pages 1-23, May.

    More about this item

    Keywords

    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:finlet:v:65:y:2024:i:c:s1544612324006214. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/frl .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.