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The Impact of Corporate Taxes on Firm Innovation: Evidence from the Corporate Tax Collection Reform in China / Jing Cai, Yuyu Chen, Xuan Wang.
- Format:
- Book
- Author/Creator:
- Cai, Jing.
- Series:
- Working Paper Series (National Bureau of Economic Research) no. w25146.
- NBER working paper series no. w25146
- Language:
- English
- Physical Description:
- 1 online resource: illustrations (black and white);
- Other Title:
- Impact of Corporate Taxes on Firm Innovation
- Place of Publication:
- Cambridge, Mass. National Bureau of Economic Research 2018.
- Summary:
- This paper exploits a tax reform on manufacturing firms in China to study the impact of taxes on firm innovation. The reform switched the corporate income tax collection from the local to the state tax bureau and reduced the effective tax rate by 10%. The reform only applied to firms established after January 2002, allowing us to use regression discontinuity design as the identification strategy. The results show that lower taxes improved both quantity and quality of firm innovation. Moreover, the reform has a bigger impact on firms that are financially constrained and firms that engage more in tax evasion.
- Notes:
- Print version record
- October 2018.
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