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The impact of the 2009 value added tax reform on enterprise investment and employment ‐ Empirical analysis based on Chinese tax survey data

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  • Wang D.

    (UNU-MERIT)

Abstract

This paper uses the National Tax Survey enterprise data to assess the impact of Chinas nationwide VAT reform of 2009 on enterprise fixed-asset investment and employment. The main finding of our research is that the reform significantly increased business investment in fixed assets, but had no obvious effect on employment. Furthermore, the reform promoted corporate investment mainly by encouraging machinery and equipment, but not plant and building investment.

Suggested Citation

  • Wang D., 2013. "The impact of the 2009 value added tax reform on enterprise investment and employment ‐ Empirical analysis based on Chinese tax survey data," MERIT Working Papers 059, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
  • Handle: RePEc:unm:unumer:2013059
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    File URL: https://www.merit.unu.edu/publications/wppdf/2013/wp2013-059.pdf
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    References listed on IDEAS

    as
    1. Hassett, Kevin A. & Hubbard, R. Glenn, 2002. "Tax policy and business investment," Handbook of Public Economics,in: A. J. Auerbach & M. Feldstein (ed.), Handbook of Public Economics, edition 1, volume 3, chapter 20, pages 1293-1343 Elsevier.
    2. Cummins, Jason G. & Hassett, Kevin A. & Hubbard, R. Glenn, 1996. "Tax reforms and investment: A cross-country comparison," Journal of Public Economics, Elsevier, vol. 62(1-2), pages 237-273, October.
    3. Huihua Nie & Mingyue Fang & Tao Li, 2010. "China’s value-added tax reform, firm behavior and performance," Frontiers of Economics in China, Springer;Higher Education Press, vol. 5(3), pages 445-463, September.
    4. Cai, Jing & Harrison, Ann, 2011. "The value-added tax reform puzzle," Policy Research Working Paper Series 5788, The World Bank.
    5. Christopher L. House & Matthew D. Shapiro, 2008. "Temporary Investment Tax Incentives: Theory with Evidence from Bonus Depreciation," American Economic Review, American Economic Association, vol. 98(3), pages 737-768, June.
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    1. repec:eee:chieco:v:46:y:2017:i:s:p:s17-s34 is not listed on IDEAS

    More about this item

    Keywords

    Taxation and Subsidies; Incidence; Business Taxes and Subsidies including sales and value-added (VAT);

    JEL classification:

    • H22 - Public Economics - - Taxation, Subsidies, and Revenue - - - Incidence
    • H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies

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