The influence of fiscal policy uncertainty on corporate total factor productivity: Evidence from Chinese public companies

Rongwu Zhang, Lan Luo and Jianjun Du

Contemporary Economic Policy, 2023, vol. 41, issue 3, 532-554

Abstract: This paper uses China's public companies to test the influence of fiscal policy uncertainty on corporate total factor productivity. The study finds that fiscal policy uncertainty has a negative impact on the total factor productivity, and the effect of conservative tax avoidance, a mediating variable between the two, is found more significant for non‐state‐owned and non‐recession‐stage enterprises. The study further finds that facing fiscal policy uncertainty, companies reduce R&D investment, which will deteriorate productivity. The overall results show that if the government maintains relatively stable fiscal policies, it will positively improve corporate total factor productivity, even in a longer period.

Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:bla:coecpo:v:41:y:2023:i:3:p:532-554

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