Tax Incentives and Enterprise Shifting from Virtual to Real:Evidence from Entrusted Loans
By employing hand-collected microdata on entrusted loans of listed companies from 2011 to 2017,and by using the accelerated depreciation policy of fixed assets intro-duced in 2014 as a quasi-experiment,this study empirically analyzes the effect of tax incen-tives on enterprise investment choice based on a difference in difference(DID)model.Re-sults indicate that tax incentives significantly reduce corporate entrusted loans.The mecha-nism tests show that the tax incentives reduce entrusted loans by increasing real corporate investments and real capital return.Furthermore,tax incentives have a greater impact on entrust loans for financial investment than entrust loans for business support.The results suggests that tax incentives promote the shift from virtual to real in both asset allocation and entrusted loan attributes.Moreover,the impact of tax incentives on entrust loans is more significant in mature and low-growth enterprises.
Tax IncentivesEntrusted loansEnterprise Shifting from Virtual to RealShadow Banking
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