首页 | 本学科首页   官方微博 | 高级检索  
     检索      


Determinants of Regional Investment Decisions in China: An Econometric Model of Tax Incentive Policy
Authors:Tung  Samuel  Cho  Stella
Institution:(1) Department of Accountancy and Law, The Hong Kong Baptist University, 224 Waterloo Road, Kowloon Tong, Hong Kong;(2) Department of Accountancy, The Hong Kong Polytechnic University, Hung Hom, Kowloon, Hong Kong
Abstract:This paper examines whether concessionary tax rates and tax incentives can attract foreign direct investment (FDI) into certain designated areas in China. Since China opened its doors to foreign investors in 1979, tax benefits have been used extensively to attract FDI into different areas. In 1991, a new tax law was introduced which superseded two previous income tax laws. This new law provides additional tax benefits which improve the investment environment for foreign investors. This study investigates the effect of China's tax rates and tax incentive policy on FDI and on the locational choices of foreign firms. Our empirical results indicate that tax rates and incentives are important determinants of regional investment decisions in China, after controlling for potential confounding variables covering infrastructure, unemployment rate, wage rate and agglomeration economics. Specifically, areas offering lower tax rates and increased tax incentives are found to attract greater amounts of FDI. The impetus of the tax effect on FDI is more apparent in the post-1991 period due to changes in the tax laws. Our results also suggest that infrastructure variables are important determinants of regional investment decisions.
Keywords:tax rates  tax incentives  locational choices  investment incentives zones  foreign direct investment
本文献已被 SpringerLink 等数据库收录!
设为首页 | 免责声明 | 关于勤云 | 加入收藏

Copyright©北京勤云科技发展有限公司  京ICP备09084417号