Tax Compliance and Investment Incentives: Firm Responses to Accelerated Depreciation in China

• Published in: Journal of economic behavior & organization Vol. 176; pp. 1 - 17
• Main Authors: Fan, Ziying, Liu, Yu
• Format: Journal Article
• Language: English
• Published: Elsevier B.V 01.08.2020
• Subjects: Accelerated depreciation; Firm investment; Tax compliance; Tax incentives; Accelerated depreciation; Tax incentives; Tax compliance; D22; Firm investment; H32

We evaluate the effects of a Chinese accelerated depreciation policy that occurred in 2014 on firm investment. We present three findings. First, on average, the policy increased firms’ investment in eligible capital, especially the purchase of equipment and machines. Second, the policy effects are s...