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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, Dec 19, 2018We explore a tax reform on manufacturing firms in China in order to study the impact of taxes on firm innovation. The reform switched corporate income tax collection from a local to state tax bureau and reduced the effective tax rate by 10 percent. The reform only applied to firms established after January 2002, allowing us to use a regression...
Corporate Innovation and IPO Interventions
Lin William Cong, Sabrina T. Howell, May 20, 2020The Chinese government has occasionally suspended IPOs, exogenously creating uncertainty about access to public markets for firms already approved to list. We show that suspension-induced delay reduces corporate innovation activity both during the delay and for years after listing.
Hayek, Local Information, and the Decentralization of Chinese State-owned Enterprises
Lixin Colin Xu, May 23, 2018Hayek (1945) predicts that where local information is important, the organization of production should be decentralized. This prediction is tested and supported in the context of the decentralization of Chinese state-owned enterprises (SOEs). SOEs are more likely to decentralize with increasing distance from the seat of the oversight government. This likelihood is especially strong when performance heterogeneity is greater and/or transportation costs are higher.
Unequal School Enrollment Rights and Increased Inequality: The Case of Shanghai
Muyang Zhang, Jie Chen, Jan 03, 2018In Shanghai, housing entitlements with enrollment access to a good public primary school is associated with a 0.1-0.35 percentage point lower annual rental yield. This rental yield gap is the opportunity cost of securing such housing, which is within the affordability range of most middle-income families in Shanghai. This implies that, should there be no credit constraint for homeownership, children from middle-income families should have a higher likelihood of accessing better public education. We find, however, that the enrollment rights between homeowners and renters, together with the credit constraint to own a home, actually lowers the chance of children from middle-income families of attending better public schools relative to those children from families with high initial wealth. This resulting reduced intergeneration mobility exacerbates the social inequality in China.
China’s War on Pollution: A Review of Evidence from the First Five Years
Michael Greenstone, Guojun He, Shanjun Li, Eric Zou, Jun 30, 2021The decade from 2010 to 2019 marked a significant turning point in China’s approach to environmental regulation and pollution. This review article examines recent trends in air and water quality, with a focus on the five years following the Chinese government’s announcement of its “war on pollution” in 2014. It also summarizes the emerging literature that has taken advantage of recent improvements in data availability and accuracy to understand the social, economic, and health impacts of environmental pollution in China.
