The impact of social security contributions on corporate innovation: evidence from the contribution collection reform in China

Chao Zhang, Lifang Chen and Huasheng Song

Applied Economics, 2022, vol. 54, issue 46, 5320-5334

Abstract: This paper identifies a positive causal effect of social security contributions on corporate innovation by exploiting the staggered passage of social contributions collection reforms in China. The collection of social security contributions was switched from social security institutions to tax authorities in Chinese provinces that have adopted collection reforms, which reduced employer-borne contributions. Our results indicate that a decrease in employer social security contributions induces an increase in the demand for labor by making labor less costly, subsequently discouraging labor-saving innovation. Moreover, the response of the innovation to the reforms is stronger for labor-intensive firms and non-state-owned enterprises.

Date: 2022
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://hdl.handle.net/10.1080/00036846.2022.2042480 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:taf:applec:v:54:y:2022:i:46:p:5320-5334

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/RAEC20

DOI: 10.1080/00036846.2022.2042480

Access Statistics for this article

Applied Economics is currently edited by Anita Phillips

More articles in Applied Economics from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().