Accelerated depreciation tax policy and multiple-product firms’ export behaviour: evidence from China

ABSTRACT

Using the 2014 accelerated depreciation tax policy (ADP) in China as a quasi-natural experiment, this study examines ADP’s impact on multiple-product firms’ export behaviour. Using data on Chinese A-share listed multiple-product companies from 2011 to 2016, we find that ADP enhances export product quality and reduces the unit price of export products by increasing enterprise innovation, accelerating ‘machine replacing labours’, and realizing the ‘economies of scale effect’. Notably, these effects are pronounced in cost-based competence firm. These findings provide developing countries with insights into the use of ADP to encourage high-quality export development.

KEYWORDS:

• Accelerated depreciation tax policy
• difference-in-difference
• export product quality
• export behaviour

JEL CLASSIFICATION:

• F14
• H39
• C13

Disclosure statement

No potential conflict of interest was reported by the author(s).

Supplementary materials

Supplemental data for this article can be accessed online at https://doi.org/10.1080/13504851.2024.2367083.

Notes

¹ The six industries are presented in supplementary materials.

² Firm-level export data is only available until 2016. Additionally, considering the optimal sample selection criteria for the difference-in-difference (DID) method and the release year of ADP is 2014, the sample period of this study is 2011–2016.

³ Supplementary materials provide more detail information.

⁴ Firm-Product level cluster robust standard errors.

⁵ If the region where the enterprise is located starts piloting the ‘Golden Tax Phase III’ in that year, the value of this variable is 1, otherwise 0.

⁶ The identification of competition strategy is presented in Table 2A.

Additional information

Funding

This study was supported by Project of Humanities and Social Sciences of the Ministry of Education of China [23YJC790165].