Tax Policy and Total Factor Carbon Emission Efficiency: Evidence from China’s VAT Reform
Abstract
:1. Introduction
2. Background and Research Hypothesis
2.1. Background of VAT Reform in China
2.2. Research Hypothesis
2.2.1. Basic Hypothesis
2.2.2. Mechanism Hypothesis
3. Methodology and Data
3.1. Model Setting
3.2. Variables and Data
3.2.1. Variables
Dependent Variable
Independent Variable
Mechanism Variables
Control Variable
3.2.2. Data Source and Descriptive Statistics
4. Empirical Result
4.1. The Impact of VAT Reform on TFCEE
4.2. Parallel Trend and Placebo Test
4.2.1. Parallel Trend Test
4.2.2. Placebo Test
4.3. Robustness Checks
4.4. Mechanisms Analysis
4.5. Heterogeneity Analysis
4.5.1. Location of the City
4.5.2. Scale of the City
5. Discussion
6. Policy Implications
7. Conclusions
Author Contributions
Funding
Institutional Review Board Statement
Informed Consent Statement
Data Availability Statement
Acknowledgments
Conflicts of Interest
References
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July 2004 | Liaoning Province, Jilin Province, and Heilongjiang Province. |
July 2007 | Twenty-six cities located in the middle six provinces. Specifically, the cities are Taiyuan, Datong, Yangquan, and Chang Zhi in Shanxi Province; Hefei, Maan shan, Bengbu, Wuhu, and Huainan in Anhui Province; Nanchang, Ping xiang, Jingdezhen, and Jiu Jiang in Jiangxi Province; Zhengzhou, Luoyang, Jiaozuo, Ping ding shan, and Kaifeng in Henan Province; Wuhan, Huang shi, Xiang fan, and Shi yan in Hubei Province; and Changsha, Zhuzhou, Xiangtan, and Hengyang in Hunan Province |
July 2008 | Four cities in Inner Mongolia, namely Hulunbuir, Xingan, Tongliao, Chifeng, and Xilingele, and fifty-one counties that suffered from the Wen chuan earthquake. The counties are located in Guangyuan, Mianyang, and Deyang city in Sichuan Province; Longnan city in Gansu province; and Baoji in Shanxi Province |
January, 2009 | Nation-wide |
Input-Output | Variable | Measurement | Unit |
---|---|---|---|
Input | Labor force | The total number of employees of each city | 10,000 people |
Capital | The capital stock of each city by using the perpetual inventory method | CNY 10,000 | |
Energy | Total energy consumption of each city | 10,000 tons | |
Desirable Output | Economic value | Real gross domestic production (GDP) of each city treated with the located provincial GDP deflator | CNY 10,000 |
Undesirable Output | CO2 | Total carbon emissions of each city | 10,000 tons |
Variable | Symbol | Obs | Mean | Std. Dev. | Min | Max |
---|---|---|---|---|---|---|
Total Factor Carbon Emission Efficiency | TFCEE | 4794 | 0.291 | 0.106 | 0.106 | 1 |
GDP per capita | Gpc | 4776 | 37,659.013 | 31,754.193 | 99 | 467,749 |
Industrial structural | Is | 4787 | 256,758.56 | 453,702.770 | 8300 | 6,810,780 |
Human capital | Hc | 4787 | 1.134 | 4.050 | 0.010 | 106.8 |
Sulfur dioxide | SO2 | 4609 | 52,348.155 | 56,987.843 | 2 | 683,162 |
FDI | FDI | 3764 | 3,926,520.5 | 12,749,891 | 0 | 1.511 × 108 |
Technological innovation | Ti | 4786 | 3318.954 | 9663.539 | 1 | 166,609 |
Population density | Pd | 3662 | 425.668 | 323.456 | 4.7 | 2661.54 |
Variable | (1) | (2) |
---|---|---|
TFCEE | TFCEE | |
VAT | 0.0459 *** | 0.0309 *** |
(0.00511) | (0.00450) | |
Gpc | 1.31 × 10−6 *** | |
(7.30 × 10−8 ) | ||
Pd | 7.24 × 10−5 *** | |
(1.40 × 10−5 ) | ||
SO2 | −1.79 × 10−7 *** | |
(4.07 × 10−8 ) | ||
Constant | 0.259 *** | 0.212 *** |
(0.00366) | (0.00738) | |
Year-FE | YES | YES |
City-FE | YES | YES |
Observations | 4794 | 3631 |
R-squared | 0.688 | 0.794 |
Variable | (1) | (2) | (3) |
---|---|---|---|
TFCEE-DDF | TFCEE-EBM | TFCEE-SBM (year < 2009) | |
VAT | 0.0837 *** | 0.0709 *** | 0.0091 ** |
(0.0059) | (0.0047) | (0.0043) | |
Constant | 0.598 *** | 0.339 *** | 0.287 *** |
(0.0042) | (0.0034) | (0.0014) | |
Controls | YES | YES | YES |
Year-FE | YES | YES | YES |
City-FE | YES | YES | YES |
Observations | 4794 | 4794 | 1974 |
R-squared | 0.764 | 0.771 | 0.921 |
Variable | (1) | (2) | (3) | (4) | (5) | (6) | (7) | (8) |
---|---|---|---|---|---|---|---|---|
Is | Ln (Is) | Ti | Ln (Ti) | Hc | Ln (Hc) | FDI | Ln (FDI) | |
VAT | 47,108 *** | 0.105 *** | 2434 *** | 0.569 *** | 0.281 * | 0.190 *** | 960,625 ** | 0.0785 |
(14,645) | (0.0125) | (505.2) | (0.0346) | (0.150) | (0.0250) | (422,847) | (0.0512) | |
Constant | 224,038 *** | 11.97 *** | 1629 *** | 5.960 *** | 0.939 *** | −1.014 *** | 3.323 × 106 *** | 13.00 *** |
(10,481) | (0.0089) | (361.5) | (0.0248) | (0.107) | (0.0179) | (278,453) | (0.0339) | |
Controls | YES | YES | YES | YES | YES | YES | YES | YES |
Year-FE | YES | YES | YES | YES | YES | YES | YES | YES |
City-FE | YES | YES | YES | YES | YES | YES | YES | YES |
Observations | 4787 | 4787 | 4786 | 4786 | 4787 | 4787 | 3760 | 3743 |
R-squared | 0.861 | 0.966 | 0.636 | 0.956 | 0.817 | 0.938 | 0.872 | 0.936 |
Variable | (1) | (2) | (3) | (4) | (5) | (6) |
---|---|---|---|---|---|---|
Coastal City | Coastal City | Coastal City | Inland City | Inland City | Inland City | |
SBM | EBM | DDF | SBM | EBM | DDF | |
VAT | 0.0587 *** | 0.130 *** | 0.0867 *** | 0.0434 *** | 0.0618 *** | 0.0835 *** |
(0.0204) | (0.0150) | (0.0166) | (0.0049) | (0.0049) | (0.0066) | |
Constant | 0.289 *** | 0.369 *** | 0.644 *** | 0.253 *** | 0.333 *** | 0.589 *** |
(0.0144) | (0.011) | (0.012) | (0.0035) | (0.0035) | (0.0045) | |
Controls | YES | YES | YES | YES | YES | YES |
Year-FE | YES | YES | YES | YES | YES | YES |
City-FE | YES | YES | YES | YES | YES | YES |
Observations | 748 | 748 | 748 | 4046 | 4046 | 4046 |
R-squared | 0.646 | 0.817 | 0.792 | 0.703 | 0.742 | 0.756 |
Variable | (1) | (2) | (3) | (4) | (5) | (6) |
---|---|---|---|---|---|---|
Large Cities and Megacities | Large Cities and Megacities | Large Cities and Megacities | Small and Medium-Cities | Small and Medium-Cities | Small and Medium-Cities | |
SBM | EBM | DDF | SBM | EBM | DDF | |
VAT | 0.0820 *** | 0.129 *** | 0.0900 *** | 0.0449 *** | 0.0673 *** | 0.0843 *** |
(0.0205) | (0.0187) | (0.0171) | (0.0047) | (0.0046) | (0.0061) | |
Constant | 0.233 *** | 0.361 *** | 0.583 *** | 0.260 *** | 0.337 *** | 0.599 *** |
(0.0149) | (0.0136) | (0.0125) | (0.0035) | (0.0033) | (0.0044) | |
Controls | YES | YES | YES | YES | YES | YES |
Year-FE | YES | YES | YES | YES | YES | YES |
City-FE | YES | YES | YES | YES | YES | YES |
Observations | 357 | 357 | 357 | 4437 | 4437 | 4437 |
R-squared | 0.817 | 0.879 | 0.897 | 0.713 | 0.769 | 0.754 |
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Gao, D.; Mo, X.; Xiong, R.; Huang, Z. Tax Policy and Total Factor Carbon Emission Efficiency: Evidence from China’s VAT Reform. Int. J. Environ. Res. Public Health 2022, 19, 9257. https://doi.org/10.3390/ijerph19159257
Gao D, Mo X, Xiong R, Huang Z. Tax Policy and Total Factor Carbon Emission Efficiency: Evidence from China’s VAT Reform. International Journal of Environmental Research and Public Health. 2022; 19(15):9257. https://doi.org/10.3390/ijerph19159257
Chicago/Turabian StyleGao, Da, Xinlin Mo, Ruochan Xiong, and Zhiliang Huang. 2022. "Tax Policy and Total Factor Carbon Emission Efficiency: Evidence from China’s VAT Reform" International Journal of Environmental Research and Public Health 19, no. 15: 9257. https://doi.org/10.3390/ijerph19159257