Influencing Efficiency of Tax Relief on the Capital Market: An Empirical Study of China Supply-Side Reform

Changjun Jiang, Sanggyun Na and Fengting Jiang
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Changjun Jiang: School of Business Administration, Wonkwang University, 460 Iksandae-ro, Iksan, Jeonbuk 54538, Korea
Sanggyun Na: School of Business Administration, Wonkwang University, 460 Iksandae-ro, Iksan, Jeonbuk 54538, Korea
Fengting Jiang: School of Economics and Management and School of Education, JiuJiang University, JiuJiang 332005, China

Sustainability, 2019, vol. 11, issue 11, 1-19

Abstract: One of the primary tasks of supply-side reform is to promote the reform of fiscal and taxation systems. It is an important part of institutional innovation to coordinate fiscal and other reforms. From the perspective of the supply side, this paper discusses whether the adjustment of fiscal and monetary policies will have a positive impact on China’s capital market and economic growth. In this paper, a windows-EBM model is constructed to test the panel data of major economies between 2008 and 2016, discuss their impact on the efficiency of the capital market, and to make a comparative analysis on the strategies to improve the vitality of China’s capital market. We find that the impact of China’s macro policies on capital market efficiency during 2008-2016 shows a huge potential space for adjusting fiscal and monetary policies, because these input factors are obviously interchangeable in China’s supply-side reform. This is in line with the expected direction of China’s supply-side reform. This paper reveals the positive effect of supply-side reform on capital activity. Tax cuts and monetary policy measures are needed to balance capital markets and to ensure their active and sustainable development.

Keywords: supply–side reform; fiscal and monetary policies; capital market; influencing efficiency; windows-EBM model (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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