skip to content
Tax policy and lumpy investment behavior : evidence from China's VAT reform Preview this item
ClosePreview this item
Checking...

Tax policy and lumpy investment behavior : evidence from China's VAT reform

Author: Zhao ChenXian JiangZhikuo LiuJuan Carlos Suárez SerratoDaniel Yi XuAll authors
Publisher: Cambridge, Mass. : National Bureau of Economic Research, 2019.
Series: Working paper series (National Bureau of Economic Research), no. 26336.
Edition/Format:   eBook : Document : EnglishView all editions and formats
Summary:
A universal fact of firm-level data is that investment is lumpy: firms either replace a considerable fraction of their existing capital (spike) or do not invest at all (inaction). This paper incorporates the lumpy nature of investment into the study of how tax policy affects investment behavior. We show that tax policy can directly impact the lumpiness of investment and that the effectiveness of tax incentives in  Read more...
Rating:

(not yet rated) 0 with reviews - Be the first.

Subjects
More like this

Find a copy online

Find a copy in the library

&AllPage.SpinnerRetrieving; Finding libraries that hold this item...

Details

Material Type: Document, Internet resource
Document Type: Internet Resource, Computer File
All Authors / Contributors: Zhao Chen; Xian Jiang; Zhikuo Liu; Juan Carlos Suárez Serrato; Daniel Yi Xu; National Bureau of Economic Research,
OCLC Number: 1124682743
Notes: "October 2019"
Description: 1 online resource (89 pages) : illustrations.
Series Title: Working paper series (National Bureau of Economic Research), no. 26336.
Responsibility: Zhao Chen, Xian Jiang, Zhikuo Liu, Juan Carlos Suárez Serrato, Daniel Xu.

Abstract:

A universal fact of firm-level data is that investment is lumpy: firms either replace a considerable fraction of their existing capital (spike) or do not invest at all (inaction). This paper incorporates the lumpy nature of investment into the study of how tax policy affects investment behavior. We show that tax policy can directly impact the lumpiness of investment and that the effectiveness of tax incentives in stimulating investment depends crucially on interactions with investment frictions. We illustrate these results by studying one of the largest tax incentives for investment in recent history: China's 2009 VAT reform. Using administrative tax data and a difference-in-differences design, we document that the reform increased investment by 36% and that this effect is driven by additional investment spikes. We then simulate the fiscal cost of stimulating investment through different tax policies using a dynamic investment model that is consistent with the reduced-form effects of the reform. Policies that directly reduce the likelihood of firm inaction (e.g., investment tax credits) are more effective at stimulating investment than policies that only reduce the tax cost of investment (e.g., corporate income tax cuts).

Reviews

User-contributed reviews
Retrieving GoodReads reviews...
Retrieving DOGObooks reviews...

Tags

Be the first.
Confirm this request

You may have already requested this item. Please select Ok if you would like to proceed with this request anyway.

Linked Data


Primary Entity

<http://www.worldcat.org/oclc/1124682743> # Tax policy and lumpy investment behavior : evidence from China's VAT reform
    a schema:Book, schema:MediaObject, schema:CreativeWork ;
    library:oclcnum "1124682743" ;
    library:placeOfPublication <http://id.loc.gov/vocabulary/countries/mau> ;
    schema:about <http://experiment.worldcat.org/entity/work/data/9591687151#Topic/taxation_china_econometric_models> ; # Taxation--China--Econometric models
    schema:about <http://experiment.worldcat.org/entity/work/data/9591687151#Topic/fiscal_policy_econometric_models> ; # Fiscal policy--Econometric models
    schema:about <http://experiment.worldcat.org/entity/work/data/9591687151#Event/since_2000> ; # Since 2000
    schema:about <http://experiment.worldcat.org/entity/work/data/9591687151#Place/china> ; # China.
    schema:about <http://experiment.worldcat.org/entity/work/data/9591687151#Topic/value_added_tax_econometric_models> ; # Value-added tax--Econometric models
    schema:about <http://experiment.worldcat.org/entity/work/data/9591687151#Topic/fiscal_policy_china_econometric_models> ; # Fiscal policy--China--Econometric models
    schema:about <http://experiment.worldcat.org/entity/work/data/9591687151#Topic/business_enterprises_capital_investments_china_econometric_models> ; # Business enterprises--Capital investments--China--Econometric models
    schema:about <http://experiment.worldcat.org/entity/work/data/9591687151#Topic/value_added_tax_china_econometric_models> ; # Value-added tax--China--Econometric models
    schema:about <http://experiment.worldcat.org/entity/work/data/9591687151#Topic/economic_policy_econometric_models> ; # Economic policy--Econometric models
    schema:about <http://experiment.worldcat.org/entity/work/data/9591687151#Topic/taxation_econometric_models> ; # Taxation--Econometric models
    schema:author <http://experiment.worldcat.org/entity/work/data/9591687151#Person/suarez_serrato_juan_carlos> ; # Juan Carlos Suárez Serrato
    schema:author <http://experiment.worldcat.org/entity/work/data/9591687151#Person/chen_zhao_1973> ; # Zhao Chen
    schema:author <http://experiment.worldcat.org/entity/work/data/9591687151#Person/jiang_xian> ; # Xian Jiang
    schema:author <http://experiment.worldcat.org/entity/work/data/9591687151#Person/xu_daniel_yi> ; # Daniel Yi Xu
    schema:author <http://experiment.worldcat.org/entity/work/data/9591687151#Person/liu_zhikuo> ; # Zhikuo Liu
    schema:bookFormat schema:EBook ;
    schema:datePublished "2019" ;
    schema:description "A universal fact of firm-level data is that investment is lumpy: firms either replace a considerable fraction of their existing capital (spike) or do not invest at all (inaction). This paper incorporates the lumpy nature of investment into the study of how tax policy affects investment behavior. We show that tax policy can directly impact the lumpiness of investment and that the effectiveness of tax incentives in stimulating investment depends crucially on interactions with investment frictions. We illustrate these results by studying one of the largest tax incentives for investment in recent history: China's 2009 VAT reform. Using administrative tax data and a difference-in-differences design, we document that the reform increased investment by 36% and that this effect is driven by additional investment spikes. We then simulate the fiscal cost of stimulating investment through different tax policies using a dynamic investment model that is consistent with the reduced-form effects of the reform. Policies that directly reduce the likelihood of firm inaction (e.g., investment tax credits) are more effective at stimulating investment than policies that only reduce the tax cost of investment (e.g., corporate income tax cuts)."@en ;
    schema:exampleOfWork <http://worldcat.org/entity/work/id/9591687151> ;
    schema:inLanguage "en" ;
    schema:isPartOf <http://experiment.worldcat.org/entity/work/data/9591687151#Series/nber_working_paper_series> ; # NBER working paper series ;
    schema:isPartOf <http://experiment.worldcat.org/entity/work/data/9591687151#Series/working_paper_series_national_bureau_of_economic_research> ; # Working paper series (National Bureau of Economic Research) ;
    schema:name "Tax policy and lumpy investment behavior : evidence from China's VAT reform"@en ;
    schema:productID "1124682743" ;
    schema:publisher <http://experiment.worldcat.org/entity/work/data/9591687151#Organization/national_bureau_of_economic_research> ; # National Bureau of Economic Research,
    schema:url <http://papers.nber.org/papers/26336> ;
    schema:url <http://www.nber.org/papers/w26336> ;
    wdrs:describedby <http://www.worldcat.org/title/-/oclc/1124682743> ;
    .


Related Entities

<http://experiment.worldcat.org/entity/work/data/9591687151#Organization/national_bureau_of_economic_research> # National Bureau of Economic Research,
    a schema:Organization ;
    schema:name "National Bureau of Economic Research," ;
    .

<http://experiment.worldcat.org/entity/work/data/9591687151#Person/chen_zhao_1973> # Zhao Chen
    a schema:Person ;
    schema:birthDate "1973" ;
    schema:familyName "Chen" ;
    schema:givenName "Zhao" ;
    schema:name "Zhao Chen" ;
    .

<http://experiment.worldcat.org/entity/work/data/9591687151#Person/jiang_xian> # Xian Jiang
    a schema:Person ;
    schema:familyName "Jiang" ;
    schema:givenName "Xian" ;
    schema:name "Xian Jiang" ;
    .

<http://experiment.worldcat.org/entity/work/data/9591687151#Person/liu_zhikuo> # Zhikuo Liu
    a schema:Person ;
    schema:familyName "Liu" ;
    schema:givenName "Zhikuo" ;
    schema:name "Zhikuo Liu" ;
    .

<http://experiment.worldcat.org/entity/work/data/9591687151#Person/suarez_serrato_juan_carlos> # Juan Carlos Suárez Serrato
    a schema:Person ;
    schema:familyName "Suárez Serrato" ;
    schema:givenName "Juan Carlos" ;
    schema:name "Juan Carlos Suárez Serrato" ;
    .

<http://experiment.worldcat.org/entity/work/data/9591687151#Person/xu_daniel_yi> # Daniel Yi Xu
    a schema:Person ;
    schema:familyName "Xu" ;
    schema:givenName "Daniel Yi" ;
    schema:name "Daniel Yi Xu" ;
    .

<http://experiment.worldcat.org/entity/work/data/9591687151#Series/nber_working_paper_series> # NBER working paper series ;
    a bgn:PublicationSeries ;
    schema:hasPart <http://www.worldcat.org/oclc/1124682743> ; # Tax policy and lumpy investment behavior : evidence from China's VAT reform
    schema:name "NBER working paper series ;" ;
    .

<http://experiment.worldcat.org/entity/work/data/9591687151#Series/working_paper_series_national_bureau_of_economic_research> # Working paper series (National Bureau of Economic Research) ;
    a bgn:PublicationSeries ;
    schema:hasPart <http://www.worldcat.org/oclc/1124682743> ; # Tax policy and lumpy investment behavior : evidence from China's VAT reform
    schema:name "Working paper series (National Bureau of Economic Research) ;" ;
    .

<http://experiment.worldcat.org/entity/work/data/9591687151#Topic/business_enterprises_capital_investments_china_econometric_models> # Business enterprises--Capital investments--China--Econometric models
    a schema:Intangible ;
    schema:name "Business enterprises--Capital investments--China--Econometric models"@en ;
    .

<http://experiment.worldcat.org/entity/work/data/9591687151#Topic/economic_policy_econometric_models> # Economic policy--Econometric models
    a schema:Intangible ;
    schema:name "Economic policy--Econometric models"@en ;
    .

<http://experiment.worldcat.org/entity/work/data/9591687151#Topic/fiscal_policy_china_econometric_models> # Fiscal policy--China--Econometric models
    a schema:Intangible ;
    schema:name "Fiscal policy--China--Econometric models"@en ;
    .

<http://experiment.worldcat.org/entity/work/data/9591687151#Topic/fiscal_policy_econometric_models> # Fiscal policy--Econometric models
    a schema:Intangible ;
    schema:name "Fiscal policy--Econometric models"@en ;
    .

<http://experiment.worldcat.org/entity/work/data/9591687151#Topic/taxation_china_econometric_models> # Taxation--China--Econometric models
    a schema:Intangible ;
    schema:name "Taxation--China--Econometric models"@en ;
    .

<http://experiment.worldcat.org/entity/work/data/9591687151#Topic/taxation_econometric_models> # Taxation--Econometric models
    a schema:Intangible ;
    schema:name "Taxation--Econometric models"@en ;
    .

<http://experiment.worldcat.org/entity/work/data/9591687151#Topic/value_added_tax_china_econometric_models> # Value-added tax--China--Econometric models
    a schema:Intangible ;
    schema:name "Value-added tax--China--Econometric models"@en ;
    .

<http://experiment.worldcat.org/entity/work/data/9591687151#Topic/value_added_tax_econometric_models> # Value-added tax--Econometric models
    a schema:Intangible ;
    schema:name "Value-added tax--Econometric models"@en ;
    .


Content-negotiable representations

Close Window

Please sign in to WorldCat 

Don't have an account? You can easily create a free account.