Research

Publications 

• Elite capture or exclusion? Insights from China's targeted poverty alleviation strategy, Scottish Journal of Political Economy (2025). Presentations: 98th WEAI  Annual Conference 2023.

• The impact of fiscal inequality on economic growth: Evidence from shifts in China's fiscal system, FinanzArchiv/European Journal of Public Finance  80.4 (2024): 1-27. Preprint Presentations: 76th IIPF Virtual Conference 2020 and Dissertation Seminar 2021 at Graduate Center, CUNY.

• Local fiscal competition and deficits in China, with Timothy J. Goodspeed, International Tax and Public Finance (2024): 1-16. Preprint Presentations: 57th MVEA Virtual Conference 2020, 96th WEAI Annual Conference 2021, 77th Annual Congress of the IIPF 2021, Dissertation Seminar 2021 at Graduate Center, CUNY, 91th SEA Annual Conference 2021, and 79th Annual Congress of the IIPF 2023.

• Carbon emissions from the perspective of regional competition: Evidence from China’s low-carbon city policy, with Meng-Ting Chen and Shiyan Zhang, The Annals of Regional Science (2024): 1-25. Preprint

• Political hierarchy spillovers: Evidence from China, with Meng-Ting Chen, Economic Inquiry 62.1 (2024): 329-348. Preprint  Presentations: 96th WEAI Virtual International Conference 2021, 85th MEA Annual Conference 2021, the 100 Years of Economic Development Conference 2022,  WRSA’s 62nd Annual Meeting 2023, and AAG 2023 Annual Meeting. 

• The effect of population aging on pension enforcement: Do firms bear the burden?, with Renjie Zhao, Economic Inquiry 60.4 (2022), 1644-1662. Preprint

• Effect of public expenditure on fertility intention to have a second child or more: Evidence from China's CGSS survey data, with Jie Tang and Xia Li, Cities 128 (2022): 103812. Preprint

• Rent-tax substitution and its impact on firms: Evidence from housing purchase limits policy in China, with Renjie Zhao, Regional Science and Urban Economics 96 (2022): 103804. Preprint Presentations: 15th Economics Graduate Student Conference (EGSC) 2020 and 90th SEA  Annual Conference 2020. 

• Local judicial system reform and corporate investment: Evidence from unified management of local courts below the province,  with Renjie Zhao, China Economic Quarterly International, 2.4 (2022): 290-303. 

Working Papers

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.

Local Protectionism and Firms’ ESG Choices: Evidence from the Judicial Independence Reform with Jiayin Li and Keyi Zhao (R&R)

Presentations (including scheduled): SUFE workshop 2023

Local protectionism has been studied to be closely related to corporate behavior. This paper exploits new sources of quasi-experimental variation in the elimination of local protectionism from judicial reforms launched in 2014 to examine its impact on the Environmental, Social, and Governance (ESG) disclosure levels of the firms. The study reveals that the judicial reform leads to an increase in the ESG disclosure scores of affected local firms. The potential mechanism behind this effect is that judicial reform escalates legal risks. Lastly, there is no evidence that the reform enhances corporate ESG performance, including metrics related to carbon emissions.

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

Presentations (including scheduled):  the IEAS Research Workshop (Academia Sinica, Taiwan) 2024, Soochow University Seminar (Taiwan) 2024, and WRSA’s 64th Annual Meeting 2025

This paper examines the labor market and investment effects of China's Environmental Protection Tax (EPT) reform, focusing on the reallocation of employment and market share between heavy-polluting and non-heavy-polluting industries. Empirical results show that the EPT reform significantly reduces employment in heavy-polluting industries while moderately increasing aggregate employment. Moreover, the reform drives green investment primarily in non-heavy-polluting industries. To complement these findings, we develop a structural model that quantifies employment reallocation and green investment dynamics before and after the reform. The model reveals that higher labor substitutability and consumer responsiveness to environmental policies enhance the positive employment effects while moderating the decline in welfare. These results offer valuable policy insights for economies seeking to balance environmental governance with sustainable economic development.

Selected Work in Progress

Political connections, tax refund acquisition, and resource misallocation: Insights from China's tax bureau merger reform  with Renjie Zhao

Estimating speculative demand: Evidence from spillover effects of China’s housing purchase restriction policy with Meng-Ting Chen

The Impact of eliminating pecuniary externality in China's housing market with Meng-Ting Chen

The economic consequences of drifting wildfire smoke with Meng-Ting Chen and Shiyan Zhang