Corporate Income Tax Unification,Manipulation of Ownership Structure and Firm's TFP—Research Based on Bunching Approach
Firms with foreign capital shares equal to or larger than 25％were eligible for many prefer-ential policies before 2008,which incentivized them to manipulate ownership structures.We find about 5％of firms conduct the manipulation and their existence lowers the average total factor productivity(TFP)of foreign firms.Quantitively,a 10-percentage decrease in corporate income tax rate would generate a 5-percentage reduction in TFP.The response is more severe in foreign firms without state or collective capital,without new products,and non-exporters.This suggests when attracting and utilizing foreign capital,policies not targeting at the ownership structure may be better in promoting productivity.
corporate income tax unificationforeign firmsbunching approach
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