Research on the Policy Effect of the VAT Reform on the Investment Behavior of Enterprises in the Perspective of Financing Constraints
Li Cheng;Chen Zhi;Ye Yingmei;
VAT reform is one of the most important policy in tax structural reduction in China. Unlike previous studies, we focus on the transmission mechanism of reform. Using Difference in Difference Model, we found that firm's financing constraint hindered the VAT transformation effect on investment efficiency. For the underinvestment firm, investment efficiency improved weaker when they faced higher financing constraints. For overinvestment firms, reform made more overinvestment no matter whether the financing constraints is higher or lower.