Whether the policy of RBTVAT has promoted the expansion of UCIBs: Quasi-natural experiment based on new statistical scope data

Qingchuan Wu, Yuanyuan Gong and Zhijuan Yan

International Review of Financial Analysis, 2021, vol. 77, issue C

Abstract: The expanded offerings of urban construction investment bonds (UCIBs) is an important component of the implicit debts of local governments in China. Based on the new statistical scope panel data on UCIBs of prefecture-level cities from 2010 to 2013, this paper constructs a quasi-natural experimental difference-in-difference (DID) model to investigate whether the “replacing business tax with value-added tax” (RBTVAT) policy has stimulated the expansion of UCIBs. The results showed that this policy has promoted the expansion of UCIBs, and such positive influence is only exists in the economically developed eastern region. The findings add to the recognition that when a country implements a tax policy reform, it should take full account of the possibility that it will increase the financial risk of local governments.

Keywords: RBTVAT; New statistical scope; Urban construction investment bond; Implicit debts (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finana:v:77:y:2021:i:c:s1057521921001551

DOI: 10.1016/j.irfa.2021.101821

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