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Corporate Tax Burden and the Digitalization of Global Value Chains: Evidence From Chinese Listed Firms

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  • Wanru Wang
  • Beiqi Xuanyuan
  • Xuhui Peng

Abstract

Despite the rapid development in digital technology, the influence of taxation on firm-level digital transformation in global value chains (GVCs) remains unclear. To empirically test this impact, this study uses a logit model with a sample comprising 1,742 Chinese listed firms in the period 2003 to 2016. The results indicate that higher tax burdens hinder firms’ participation in the digitalization of GVCs, especially in less developed regions and non-high-tech industries. Furthermore, the results regarding the mediation effects highlight that tax incentives for firms positively impact their ability to invest in research and development and adopt digital technologies, thereby enhancing their potential to participate fully in the digitalization of GVCs. These findings offer valuable insights that deepen the understanding of the role of tax incentives in promoting digital transformation and reshaping firms’ participation in GVCs. JEL Classification: F14, F23, H25, O31.

Suggested Citation

  • Wanru Wang & Beiqi Xuanyuan & Xuhui Peng, 2025. "Corporate Tax Burden and the Digitalization of Global Value Chains: Evidence From Chinese Listed Firms," SAGE Open, , vol. 15(3), pages 21582440251, August.
    • Handle: RePEc:sae:sagope:v:15:y:2025:i:3:p:21582440251353272
    DOI: 10.1177/21582440251353272
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    Keywords

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    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives

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