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Can value-added tax reform improve the export competitiveness? Evidence from China

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  • Meng, Chao
  • Zhang, Yimei

Abstract

This study uses data of China’s A-share listed firms spanning 2012–2022 to analyze the effect of value-added tax (VAT) credit refunds on export competitiveness. Additionally, it explores the characteristics of heterogeneity, analyzing the connection between tax policy and competitiveness. Notably, VAT credit refunds significantly improve firms’ export competitiveness. Mediation effect test concludes that firms’ cash flow and research and development investment play a partial intermediary role between VAT credit refunds and firm export competitiveness. Heterogeneity analysis indicates that the improvement effect is more significant in firms issuing standard audit opinions; firms with financial backgrounds; firms with directors, supervisors, and senior executives; and firms without overseas backgrounds. This study provides empirical evidence and policy reference for improving the VAT credit refund policy and assisting firms enhance their export competitiveness.

Suggested Citation

  • Meng, Chao & Zhang, Yimei, 2026. "Can value-added tax reform improve the export competitiveness? Evidence from China," Finance Research Letters, Elsevier, vol. 93(C).
    • Handle: RePEc:eee:finlet:v:93:y:2026:i:c:s1544612326001261
    DOI: 10.1016/j.frl.2026.109595
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    References listed on IDEAS

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    1. Yan Zhang & Zhuoran Bai & Christopher Findlay, 2024. "Value-added tax reform and service exports: Evidence from China," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 33(4), pages 551-573, May.
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