We formulate and estimate a general equilibrium model of innovation-led growth and use it to evaluate the quantitative implications of individual income tax reforms for innovation and aggregate productivity growth. In the model, innovation comes from entrants creating new products and incumbents...

This paper exploits a tax reform on manufacturing firms in China to study the impact of taxes on firm innovation. The reform switched the corporate income tax collection from the local to the state tax bureau and reduced the effective tax rate by 10%. The reform only applied to firms established...

The policy dividend of “Business tax changing to Value added tax” (“BT to VAT”) that the enterprise can enjoy is closely related to its own tax-transfer ability due to the easily tax-transfer characteristic of valued added tax. Based on the samples of Shanghai and Shenzhen A-share from...