Export Tax Rebate Policy Research Articles

Cross-border dual-channel supply chain decision-making under random demand and tariff conditions.

Given the cross-border e-commerce import tariff and random demands, this study establishes a pricing decision model for cross-border e-commerce dual-channel supply chain, which is composed of domestic manufacturers and overseas retailers, so as to analyze the effects of import tariff and random demand on the pricing, demand and profit of cross-border e-commerce. According to the research, import tariffs have a positive correlation with retailers' retail prices and a negative correlation with manufacturers' direct prices, wholesale prices, demand and profit from direct channels, and profit from retail channels. The export tax rebate policy will lessen the negative effects of import tariffs and maximize the best choices made by manufacturers and retailers.

EMISSION-MITIGATION-DRIVEN EXPORT TAX REBATE POLICY: AN EVOLUTIONARY GAME ANALYSIS

Export tax rebates are a common policy in global trade. With improvements to manufacturing techniques and economic development levels, export tax rebate policies are transitioning from being driven by economic objectives to being driven by environmental objectives through the alignment of export performance with environmental protection. However, existing studies lack the consideration of trade-offs between environmental objectives and economic objectives, and rarely analyze the relationship between production strategies of enterprises and export rebate rates. To formulate an efficient export tax rebate policy, an evolutionary game model is established to reveal the game relationship between the government and enterprises when export tax rebates with different policy goals are implemented. Furthermore, the impacts of export tax rebates on social welfare under different evolutionary strategies are analyzed. According to the results, enterprises fail to produce clean products in the case where economic objectives have priority. In the case where environmental objectives have priority, the output of clean products is directly related to the export tax rebate rate. In addition, the optimal tax rebate rate depends on the environmental benefits and the weights on the environmental and economic objectives. The innovation of this study lies in using the optimal dynamic response mechanism and the replication dynamic equation evolution mechanism to analyze the government-enterprise game problem in the export tax rebate mechanism according to different learning ability of the government and the enterprise. Meanwhile, we consider the influence of the weight of economic and environmental goals on both strategic choice and social welfare. The findings provide a valuable reference for designing and optimizing export tax rebate policies, especially for countries that implement export tax rebate policies and desire to improve the environment urgently.

The effect of export tax rebate policy reform on SO2 emission intensity of firms in China

The development of trade has brought about serious pollution problems, and the impact of trade policies on firms' pollution has attracted attention. Taking the export tax rebate (ETR) policy changes of “the highly energy, highly polluting and resource consuming” (HHR) products as an exogenous shock, we examine the impact of the ETR reform on the SO2 emission intensity of Chinese industrial firms by using the time-varying DD method. The study found that the ETR policy reform of HHR products could reduce the SO2 emission intensity of firms by increasing the investment of environmental protection equipment and improving the energy utilization of technology of enterprises. The heterogeneity analysis shows that the policy has a more significantly effect on technology-intensive firms, the firms with a cleaner export product structure and the firms located in less environmentally protection force areas. The findings of this paper provide empirical evidence to support the governance of corporate pollution from the perspective of ETR policy.

Are export tax rebates patronage for Chinese firms? An analysis of productivity

This paper examines the nexus between export tax rebates and productivity using Chinese firm-level data from 2000 to 2007. The empirical findings indicate that a one percentage point decrease in export tax rebate rates increases the total factor productivity (TFP) of a firm by about 0.1 percentage points. We explore the possible mechanisms that explain this nexus and attribute it to the allocation effect of export tax rebate policy; that is, export tax rebates prevent low-productivity firms from exiting the market and further reallocate resources and economic activities to them. In addition, a decrease in rebate rates significantly encourages the TFP growth of surviving firms and leads to an increase in aggregate TFP. Specifically, throughout 2000–07, the declining rebate rates accounted for 5.23% of the rise in the aggregate TFP, and the between-firm effect was 3.85%, which is much larger than the within effect.

The Influence of Export Tax Rebate on the Export of Three Kinds of Products

Since 1985, China began to implement the export tax rebate policy, mainly through adjusting the export tax rebate rate of goods to affect its profit rate, thus affecting the export scale of goods, and gradually regard the export tax rebate policy as one of the important measures to adjust the economic operation, and make adjustments according to the actual situation of economic operation. This paper reviews the history of some major adjustments of export tax rebate policy, collects relevant data, reflects the great changes of China's total export and its commodity structure, and makes in-depth analysis and summary of these changes.

Export tax rebates and resource misallocation: Evidence from a large developing country

AbstractThe export tax rebate policy is one of the most frequently used policy instruments by Chinese policy‐makers. This paper provides a vital analysis of its allocation effects. We use customs transactions, tax administration and firm‐level data to measure the effect of variation in export tax rebates, taking advantage of the large policy change in 2004. A difference‐in‐difference approach allows us to compare the production and pricing decisions of eligible versus non‐eligible firms and the distributional implications. We tie these distributional results to a structural model akin to Hsieh and Klenow (2009) where incomplete tax rebates act as a tax on revenue of export sales. A reduction in tax rebates shifts production away from rebate‐eligible firms and decreases allocative efficiency. Our takeaway is that by adjusting its value‐added tax policy as a part of broader policy objectives, China introduces an allocative efficiency dimension that must be taken into consideration.

On the Influence of the Change of Export Tax Rebate Policy on China's Export Trade

Since 1985, China began to implement the export tax rebate policy, mainly through adjusting the export tax rebate rate of goods to affect its profit rate, thus affecting the export scale of goods, and gradually regard the export tax rebate policy as one of the important measures of macroeconomic adjustment of economic operation, and make adjustments according to the actual situation of economic operation. Firstly, this paper reviews the history of some major adjustments of the export tax rebate policy, collects relevant data, reflects the great changes of China's total export and its commodity structure, makes in-depth analysis and summary of these changes, and finally puts forward relevant suggestions on the problems existing in the export tax rebate system.

Can export tax rebate alleviate financial constraint to increase firm productivity? Evidence from China

This paper assesses the impact of export tax rebate on firms’ Total Factor Productivity using a large panel of manufacturing firms for 2007–2015 in China. It finds that export tax rebate expands export volume and works as an alternative financial tunnel to increase firms’ TFP. It further shows export tax rebate can smooth financial constraints through increasing cash flow, substituting working capital and financing fixed assets investment and R&D investment. Moreover, the impact of export tax rebate on TFP increases across state, private and foreign ownerships. Heavy pollution intensive and less capital-intensive industries are strongly affected by the export tax rebate policy. Finally, these results are robust to the choice of GMM, Heckman Two-stage and PSM estimators which can better solve potential endogeneity problems and selection bias issues in this paper.

China's export tax rebate and the duration of firm export spells

AbstractUsing a survival analysis technique, this paper investigates the impact of the export tax rebate (ETR) on duration of the firm, country/destination, and product (F–C–P)‐level export spells in China. Empirical analysis of a large dataset that covers the 2001 to 2013 period shows that the effect of ETR on duration of export spells of Chinese firms is large and statistically significant. A 1 percentage point increase in ETR rate increases the duration rate of F–C–P relationships by 23.2%. Furthermore, compared with the high‐tech firms, low‐tech and middle‐tech firms experience a larger increase in the duration of export spells in response to increase in China's ETR. Firm ownership‐based analysis shows that an increase in ETR leads to a larger increase in export spells of privately owned firms than the export spells of state‐ and foreign‐owned firms. These findings have important policy implications for the design and implementation of China's ETR policy.

Who Benefits from the Export Tax Rebate Policy? Evidence from the Chinese Fishery Sector

The export tax rebate policy in China is under dispute, especially in agricultural sectors, as it is claimed that it works as a subsidy for foreign consumers rather than domestic producers. Surprisingly, little research has investigated the distribution of benefits of this policy. In this paper, we examine this in a partial equilibrium framework. We find that the effects of the export tax rebate on domestic producers depend on the relative magnitude of the export supply and import demand elasticities. The model is then applied to the Chinese fishery sector, a perfect example to illustrate the policy debate. Simulation results indicate that, although the export tax rebate increases Chinese producers’ welfare, foreign consumers capture most of its welfare benefits (60%-75%). Furthermore, the results imply that the welfare gain for Chinese producers is overestimated if vertical linkage between the retail and the farm markets is ignored.

Who Benefits from the Export Tax Rebate Policy? Evidence from the Chinese Fishery Sector

The export tax rebate policy in China is under dispute, especially in agricultural sectors, as it is claimed that it works as a subsidy for foreign consumers rather than domestic producers. Surprisingly, little research has investigated the distribution of benefits of this policy. In this paper, we examine this in a partial equilibrium framework. We find that the effects of the export tax rebate on domestic producers depend on the relative magnitude of the export supply and import demand elasticities. The model is then applied to the Chinese fishery sector, a perfect example to illustrate the policy debate. Simulation results indicate that, although the export tax rebate increases Chinese producers’ welfare, foreign consumers capture most of its welfare benefits (60%-75%). Furthermore, the results imply that the welfare gain for Chinese producers is overestimated if vertical linkage between the retail and the farm markets is ignored.

Analysis on the effects of China's fiscal and taxation policy on exporting products of photovoltaic and high-end equipment manufacturing industries

China's fiscal and taxation subsidy policy plays a positive role in promoting the international market development of emerging industries, which also brought about many problems. In this paper, countries with large overseas investment from China and those along the “One Belt One Road” project were specially selected and divided into different types of international markets according to parameters of political risk, relations with China, geographical locations, etc. The computable general equilibrium model was then used to analyze the change in the export volume to different types of countries influenced by the change in export tax rebate ratios and research and development (R&D) subsidies. Simulation results showed that the change in export tax rebate policy has a greater impact on the photovoltaic industry and a relatively low impact on the high-end equipment manufacturing industry. The change in the export tax rebate rate has different effects on the export volume of countries in different regions and has the greatest effect on the high risk region and the partnership region. Additionally, R&D subsidy has different effects on the export volume of countries in different regions and has the greatest effect on the low risk region and the poorer relation region. Therefore, suitable subsidy policy should be decided, based on the characteristics of foreign markets in different regions. Contributions of this study are expected to be used in governmental policy designing and company development strategy optimization.

China's exports, export tax rebates and exchange rate policy

AbstractThis paper examines the relationship between China's exports, export tax rebates and exchange rate policy. It offers an explanation for why China's exports continued to rise under RMB real appreciations during the Asian financial crisis. Based on a traditional export demand model, we test our hypothesis that the counteracting effects of China's export tax rebate policy have diminished the effectiveness of real exchange rates in facilitating the resolution of trade imbalances under the current pegged exchange rate regime. We find evidence that RMB real appreciations during the crisis negatively affected China's exports, but the negative effects were mitigated by the positive effects of export tax rebates. We also find evidence of a long‐run relationship between China's exports and the other explanatory variables. The empirical evidence suggests that under the pegged exchange rate regime with limited adjustments, real exchange rate movements alone cannot resolve China's external imbalances. The policy implication of this study is that China needs to redirect its decades‐long export‐oriented development strategy to one that emphasises domestic demand‐oriented development and to replace the current pegged exchange rate regime with a market‐oriented more flexible exchange rate regime.

The impact of tax rebates on export performance: China's textile exports to the USA

The paper evaluates the effectiveness of China increasing its tax rebate on textile exports to the USA. Using the difference‐in‐differences technique and employing The Harmonized System six‐digit data, it is found that the tax rebate policy boosted the growth of textile exports to the USA. Approximately 6 to 25 per cent of the growth can be attributed to this policy. The difference‐in‐differences technique appears useful in evaluating such policies and opens the door to studies measuring the impact of polices. The effectiveness of the export tax rebate policy should be a lesson for policymakers facing slumps in their exports in economic downturns and perhaps become part of the standard trade policy arsenal.

Export Tax Rebates and Resource Misallocation: Evidence from a Large Developing Country

The export tax rebate (ETR) policy is one of the most frequently used policy instruments by Chinese policy makers. This paper therefore provides a vital analysis of its allocation effects. To motivate our empirical analysis for the allocation effects of the ETR policy, we first add a tax rebate to the Melitz and Ottaviano (2008) model and examine the impact of this policy on firms' markup size and resource allocation between eligible and non-eligible firms for the rebates. We use customs transactions, tax administration, and firm-level data to measure the effect of variation in export tax rebates, taking advantage of the large policy change in 2004. A difference-indifference approach allows us to compare the production and pricing decisions of eligible versus non-eligible firms and the distributional implications. We find that an increase in tax rebates shifts production to eligible firms and that tax rebates increase allocative efficiency.

‘Flowers and criticism’: The political economy of the renminbi debate

ABSTRACT Since 2003 China has faced increasing pressure, especially from the US and Japan, to revalue the renminbi. In July 2005 China responded by announcing a small revaluation and a switch from a dollar peg to a tightly managed float against a currency basket. The mainstream economic debate, which we briefly review, has focused on whether, and to what extent, the renminbi is undervalued. From a political economy perspective, however, the more interesting question is why China has been so reluctant to significantly revalue the renminbi especially since it was keen to prove itself a ‘responsible member of the international community’ by not devaluing in the wake of the Asian financial crisis in 1997–1998. We argue that this can be explained by three factors. These are, firstly, the diminished ability of China's policy-makers to use the export tax rebate policy to mitigate the effects of a revaluation. Secondly, there are differences in the regional context between the two time periods. Thirdly, in the international game of ‘problem assignment’, China refuses to accept that the US trade deficit is its ‘problem’.

The effect of export tax rebates on export performance: Theory and evidence from China

This paper develops a Cournot quantity competition model to examine the effect of export tax rebate policy on export performance. The main conclusions drawn are as follows: (i) when a government raises the export rebate rate, the output of final goods for export by the domestic firm increases, while the output of the foreign competitor decreases; (ii) when a government raises the export rebate rate, the profit of the domestic firm increases, while that of the foreign competitor decreases; and (iii) the optimum export rebate rate is positive and greater than 1, indicating that the domestic government not only refunds fully the custom duties paid by the domestic firm on imported intermediate goods, but also offers export subsidies for its export of final goods. To corroborate the conclusions drawn based on the theoretical model, empirical analysis was carried out using the statistical data of China from 1985 to 2002. The test results of Spearman rank correlation coefficient show that China's export tax rebate policy has significant positive correlation with its exports, final domestic consumption, and foreign exchange reserve.

China's Export Tax Rebate Policy

China's Export Tax Rebate Policy

China's Export Tax Rebate Policy

China's Export Tax Rebate Policy