Industrial Policy in China: Some Intended or Unintended Consequences?

ILR Review ◽  
2019 ◽  
Vol 74 (1) ◽  
pp. 163-198 ◽  
Author(s):  
Jing Cai ◽  
Ann Harrison
Keyword(s):  
Industrial Policy ◽  
Tax Reform ◽  
Value Added ◽  
Capital Intensity ◽  
New Product ◽  
Unintended Consequences ◽  
New Product Introductions ◽  
Investment Goods ◽  
The Impact ◽  
Primary Impact

The authors explore the impact of a 2004 tax reform in China that reduced the value-added tax (VAT) on investment goods. Although the goal of the reform was to encourage upgrading of technology, results suggest there was no significant increase in fixed investment, new product introductions, or productivity. Rather, the authors find that firms shifted the composition of investment toward machinery and increased the capital intensity of production, which is consistent with a fall in the price of capital relative to labor. As a result, employment fell significantly in the treated provinces and sectors. Results are robust to a variety of approaches and suggest that the primary impact of the policy has been to induce labor-saving growth. In 2009, the VAT reform was extended to the rest of China.

The impact of new product introductions on the market value of firms

1993 ◽  
Vol 12 (1) ◽  
pp. 82-83 ◽  
Author(s):  
P.K. Chaney ◽  
T.M. Devinney ◽  
R.S. Winer
Keyword(s):  
Market Value ◽  
New Product ◽  
New Product Introductions ◽  
The Impact

scholarly journals Value added or tunneling? Evidence from new product announcements by Taiwanese business groups

2016 ◽  
Vol 22 (5) ◽  
pp. 623-641
Author(s):  
Shao-Chi Chang ◽  
I-Fen Chen
Keyword(s):  
Business Groups ◽  
Value Added ◽  
Market Value ◽  
New Product ◽  
Network Ties ◽  
Family Control ◽  
Original Analysis ◽  
Multiple Network ◽  
The Impact ◽  
Group Member

AbstractUsing new product announcement events made by group member firms in Taiwan, this study examines whether the firms’ multiple network ties within business groups benefit member firms or whether they provide a channel for controlling shareholders to tunnel. We find that the announcement of new products by group member firms has a positive effect on the market value of other, non-announcing group peers. This evidence is consistent with the value-added hypothesis. More importantly, this effect is stronger when member firms are connected via equity ties. Furthermore, we also offer an original analysis of how family control in business groups affects the impact of network ties on value creation. Our results suggest that the controlling family may discount the market value of member firms.

scholarly journals Underground economy and GDP growth: Evidence from China’s tax reforms

2021 ◽  
Vol 7 (1) ◽  
pp. 87-107
Author(s):  
Yu kun Wang ◽  
◽  
Zhang Li ◽  
Keyword(s):  
Local Governments ◽  
Tax Reform ◽  
Value Added ◽  
Underground Economy ◽  
Gdp Growth ◽  
National Bureau ◽  
Tax Reforms ◽  
Effect Change ◽  
Tax Rate ◽  
The Impact

Since 1991, China has implemented two significant tax reforms. The first reform, in 1994, was a large-scale adjustment of the tax distribution system between the central and local governments, and the second reform, in 2012, replaced business tax with value-added tax. Also, the size of China’s underground economy decreased from 13.55% in 1995 to 12.30% in 2016. The paper presents an evaluation of the effect of the two tax reforms and the existing underground economy on GDP growth in China. GDP is defined as explained variable, the explanatory variables include: the ratio of declared income to actual income, the change of concealed income, and the influence of tax rate change on declared income and concealed income. According to the tax reform in 1994 and 2012, two dummy variables are set respectively. In methodology, this paper uses Simultaneous equations model, SUR-OLSs and Slutsky identity. Our estimation is based on the official statistics of China National Bureau of Statistics in the period from 1991 to 2019. In empirical analysis, we decomposed tax changes into tax rate effect (change of budget constraint slope) and income effect (change of tax liability), then analyzed the impact of tax elasticity on GDP growth. The empirical results demonstrate that both the 1994 tax reform and 2012 tax reform have had a positive impact on GDP, with high statistical significance respectively. The results also confirm that the increase of tax rate leads to the increase of hidden income, which eventually leads to the decrease of GDP. The offered methodology can also be applied to most countries for time series analyses.

The Impact of the Industrial Policies Adopted in the Seventeenth Italian Legislature (2013-2018)

2019 ◽  
Vol 10 (9) ◽  
pp. 795-810
Author(s):  
Riccardo Gallo ◽  
Keyword(s):  
Industrial Policy ◽  
Industrial Revolution ◽  
Capital Expenditure ◽  
Aggregate Demand ◽  
Capacity Utilization ◽  
Value Added ◽  
Utilization Rate ◽  
Small Scale ◽  
Italian Economy ◽  
The Impact

This paper offers an analysis of the main industrial policy measures adopted by the three Italian governments following each other on from 2013. The first focused its industrial policy on boosting the creation of innovative start-ups and fostering small-scale enterprises in order to acquire new equipment. The second of these governments stimulated public aggregate demand and passed the reform known as the Jobs Act (2014). The industry’s capacity utilization rate rose in 2016, as did the value added of the companies to their net revenues. In 2017, the third government initiated a project aimed at driving the Italian economy into the Fourth Industrial Revolution. Up to now there have indeed been positive signals from the viewpoint of capital expenditure on plants and equipment, but not yet from that of knowledge and training for new jobs.

scholarly journals Corporate Board Interlocks and New Product Introductions

2018 ◽  
Vol 82 (1) ◽  
pp. 132-148 ◽  
Author(s):  
Raji Srinivasan ◽  
Stefan Wuyts ◽  
Girish Mallapragada
Keyword(s):  
Boards Of Directors ◽  
New Products ◽  
New Product ◽  
Organizational Adaptation ◽  
Corporate Board ◽  
Adaptation Mechanism ◽  
Board Interlocks ◽  
New Product Introductions ◽  
Packaged Goods ◽  
The Impact

Firms’ boards of directors affect many strategic outcomes. Yet the impact of boards on new products, a key organizational adaptation mechanism, has been overlooked. Addressing this gap, the authors consider the effect of the firm's board interlock centrality, the extent to which board members are connected to boards of other firms, on its new product introductions. They propose that board interlock centrality provides firms access to market intelligence, creating opportunities to introduce incremental new products. Applying the motivation-opportunity-ability theory, the authors propose that two aspects of board leadership moderate this relationship: internal (vs. external) leadership and marketing leadership. They test the hypotheses using a panel of publicly listed U.S. consumer packaged goods firms, in which most new products are incremental innovations. As hypothesized, board interlock centrality increases new product introductions. This effect is stronger when firms have high internal leadership, internal marketing leadership, and a marketing CEO; it is weaker with high intra-industry external leadership. The findings highlight the unexpected role of board interlocks on innovation outcomes and advance the literature on marketing leadership, board interlocks, and social networks.

scholarly journals TAX REFORM AND NONCOMPLIANCE IN INDONESIA

2017 ◽  
Vol 32 (2) ◽  
pp. 87 ◽  
Author(s):  
Heru Iswahyudi
Keyword(s):  
Tax Reform ◽  
Value Added ◽  
National Accounts ◽  
Top Down ◽  
Tax Reforms ◽  
Compliance Behavior ◽  
The World ◽  
The Difference ◽  
The Impact ◽  
Central Board

The purpose of this paper is to examine the impact of Indonesia’s tax reforms of 2000 and 2008/2009 on taxpayers’ noncompliance. Noncompliance is defined as the difference between the Value Added Tax (VAT) liability and the actual revenue. Data are mainly collected from the World Input-Output Database and Indonesia’s Central Board of Statistics. The methodology uses one of the ‘top-down’ approaches, in which national accounts figures are employed to arrive at an estimation of the VAT liability. It is found that compliance deteriorated when reform efforts were incomplete – that is when the reforms suffered from decelerations, setbacks or reversals. This paper contributes to the literature by providing a framework for analyzing the impact of tax reform on taxpayer’s compliance behavior.

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