*4.1. Descriptive Statistics*

Table 2 presents the descriptive statistics of variables in our regression. We can see that 90% of firms in our sample are in the automobile manufacturing industry, which is consistent with the situation that the automobile industry is less developed in China. The mean of the sharing rate of value added tax, income tax and total tax are 23%, 63%, and 50%, respectively. The average logarithm of firm age is 2, and the mean of leverage is 1%, with the standard deviation of 2% and a maximum value of 10%. The average proportion of the exports is 11%, with the standard error of 38%. Moreover, 25% of firms are SOEs and 6% foreign firms in our sample; 97% of firms are in normal operation; and 3% of the firms belong to the central government and 3% belong to large firms.

**Table 2.** Descriptive statistics of each variable.

