Research

Publications 



Working Papers


Does Elite Capture Matter? Local Political Elites and the Targeted Poverty Alleviation Strategy in China with Jie Tang and Xia Li (R&R, PDF) Presentations (including scheduled): 98th WEAI  Annual Conference 2023.

China has implemented a nationwide poverty alleviation campaign, called the targeted poverty alleviation (TPA) strategy, to achieve the national goal of completely eradicating poverty by the end of 2020. However, the capture of political elites is considered an obstacle to achieving this goal. This paper investigates whether political elite capture exists in TPA based on the specific targeting strategy using the “Thousand-Person Hundred-Village” survey dataset in 2017. Overall, TPA is not subject to political elite capture in practice and deliberately excludes political elite households from the strategy. Here, we present three main findings. First, the probability of political elite households registering in the national poverty database (jiandanglika) under TPA is approximately 12.5% lower than that of non-elite households. Second, we found that the lower registration probability of political elite households was mainly reflected in households with committee members in the village. Third, political elite connections increase the likelihood of political elite households receiving general government transfers, suggesting that political elite capture still exists in other public welfare programs.


VAT Distortion and Corporate Tax Avoidance with Renjie Zhao and Binbin Tian (Draft available upon request)

Presentations (including scheduled): 58th MVEA Virtual Conference 2021 and 97th WEAI Annual Conference 2022


Excess input VATs cannot be refunded in China, which causes a heavy financial burden for firms. Using the China National Tax Survey Database (NTSD), this paper explores the relation between input VAT credit carryovers and corporate income tax avoidance behavior. We find that the ratio of input VAT credit carryovers (IVCCs) scaled to cash inflow is negatively associated with effective corporate income tax rates (ETRs). In addition, we find that the tax avoidance activities of firms can be carried out by increasing their costs deducted before tax to underreport their profits. Finally, to explore the causal effect of input VAT credit carryovers on corporate income tax avoidance, we investigated the impact of a recent VAT reform that allowed VAT refunds for excess input VAT credits in 18 industries in 2018 using the China Stock Market & Accounting Research Database (CSMAR). The results indicate that refunding excess input VAT credits could improve corporate tax compliance.


How Does Land Use Policy Affect Local Labor Market and Housing Market? with Meng-Ting Chen  (under review, PDF)

Presentations (including scheduled):  IEAS Research Workshop (Academia Sinica, Taiwan) 2022, Soochow University Seminar (Taiwan) 2022, 98th WEAI  Annual Conference 2023, Soochow University Seminar (Suzhou) 2023, Hehai University Seminar 2023, University of New Mexico Seminar 2023, National Sun Yat-sen University Seminar (Taiwan) 2023, WRSA’s 63rd Annual Meeting 2024, New Mexico Tech Research Colloquium 2024, AAG 2024 Annual Meeting, National Central University (Taiwan) 2024, Renmin University of China Seminar in 2024, Shandong University Seminar 2024, Northwest University of Political Science and Law Seminar 2024, and Northwest University Seminar 2024.


This paper investigates the impact of land use policies on local labor and housing markets in China. Analyzing the allocation of land between residential and productive uses, we find that increasing shares of productive land significantly lowers unemployment rates, and raises regional wages and housing prices. We then develop a spatial model featuring labor search, housing development, and local public finance to quantify these empirical findings.  In addition, we conduct several counterfactual analyses, incorporating geographical constraints, to explore optimal land allocation. This paper provides insights into rapid urbanization in China from the perspective of land allocation.


Selected Work in Progress

Juridical Independence and ESG Disclosures with Jiayin Li and Keyi Zhao


Fiscal Decentralization and Local Economic Growth


Household Consumption and the Targeted Poverty Alleviation Strategy with Xia Li


Shifting Employment and Investment Structures Towards Environmental Sustainability with Meng-Ting Chen, Juin-Jen Chang, Jhy-Yuan Shieh, and Jhy-Hwa Chen 


Political Connections and Heterogeneity in Refunded VAT Credits: Evidence from China  with Renjie Zhao


The Impact of Eliminating Pecuniary Externality in China's Housing Market with Meng-Ting Chen