Table of Content

16 March 2024, Volume 44 Issue 3

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Fiscal and Tax Inclusiveness and Corporate Productivity

FANG Hongsheng1, ZHANG Xufei1, GUO Lin1, HUO Bingkun2

2024, 44(3):  1-16. 

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In 2015，the Central Committee of the Communist Party of China and the State Council issued directives for deepening the reform of institutional mechanisms and accelerating the implementation of the innovationdriven development strategy，expressly stating the need to enhance the support strength of inclusive fiscal and tax policies Since the 19th National Congress，China has been rapidly advancing the modernization of its national governance system and capabilities，with an increasing call from market entities for a fair，free，and open competitive market environment This implies a significant need for China to transition from targeted fiscal and tax policies to more universally beneficial policies However，before the implementation of such inclusive fiscal policies，two primary issues require further exploration: first，whether enhancing the inclusiveness of fiscal and tax policies contributes to an increase in corporate productivity；and second，how the implementation of inclusive fiscal policies can be optimized for better outcomes This paper endeavors to address these crucial questions
Initially，this paper integrates the “adverse selection effect” mechanism into the Bertrand competition model to capture the proactive behavior of firms seeking government subsidies，proposing a hypothesis that the impact of fiscal and tax inclusiveness on corporate productivity is uncertain，thereby extending the existing theoretical models Drawing on the China Industrial Enterprises Database from 2003—2013，and using instrumental variable methods alongside a causal mediation analysis framework，we empirically test the effects of inclusive fiscal and tax policies on corporate productivity，potential mechanisms，and industryspecific heterogeneity The findings indicate that，on average，increasing the inclusiveness of fiscal and tax policies significantly enhances corporate productivity through three mechanisms: market competition effects，adverse selection effects，and marginal cost effects Moreover，enhancing fiscal inclusiveness has a more pronounced positive effect on industries with high dependency on financing，growth opportunities，and innovation needs，while increasing tax inclusiveness benefits industries with lower financing dependency，growth opportunities，and innovation needs，showcasing clear industry heterogeneity
This paper provides targeted policy recommendations for the government to implement more precise inclusive fiscal policies，suggesting that fiscal and tax inclusiveness should be selectively enhanced according to the different characteristics of industries to avoid a onesizefitsall approach，thereby achieving more effective policy outcomes Furthermore，it offers theoretical and empirical support for Chinas transition from targeted fiscal policies to a more inclusive fiscal policy framework


Shareholding Cooperative Reform and the Governance Performance of Rural Collective-operated Assets

QIN Guoqing1, DU Baorui2, MA Jiujie1

2024, 44(3):  17-32. 

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In China，rural collective-operated assets are one of the most crucial capitals that contribute to the prosperity of the collective economy However，due to the dissolution of Peoples Commune，the tangible organizations that used to govern collective ownership no longer exist Although the nominal ownership of these assets belongs to the collective，a large majority of the collective members do not benefit from them
To address the issue mentioned above，China launched the shareholding cooperative reform for collective-operated assets at the end of 2016 This reform aims to promote coconstruction，cogovernance and cosharing of collectiveoperated assets，and make property rights of these assets clearer，thereby enhancing the efficiency of assets allocation and ensuring fair distribution of assets benefits among the collective members Therefore，does the effect of this reform align with the expectations?
Using four-period data of 381 rural collective-operated assets from Henan province and the method of staggered differenceindifferences，this paper tries to address the above question by examining the effect of shareholding cooperative reform on governance performance from the perspectives of fairness and efficiency We come to the following conclusions First，the shareholding cooperative reform can promote the fair sharing of rural collectiveoperated assets by reducing illegal occupation and unfair distribution Second，the shareholding cooperative reform can improve the operational efficiency of rural collectiveoperated assets by reducing the operational cost Third，the shareholding cooperative reform does not lead to an appreciation in assets in the short term Fourth，the effect of shareholding cooperative reform on governance performance is heterogeneous depending on the pilot type，the asset type，the rural type，the form of shares setting，the form of shares management，the structure of collective organization and the principle of voting process
This paper has the following contributions First，by employing staggered differenceindifferences，this paper provides supplementary insights into the causal inference research regarding the effects of the shareholding cooperative reform Second，this paper analyzes the heterogeneity of the effects of the shareholding cooperative reform in different contexts By doing so，we have uncovered both positive experiences and inappropriate practices during the reform process



The Money Multiplier under the Framework of the Two-tier Deposit Multipliers

WANG Guogang, LUO Yu, PAN Deng

2024, 44(3):  33-48. 

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There are two main definitions of money multiplier in literature： one is “deposit multiplier”，and its brief connotation is the expansion multiple of deposit money under the legal reserve ratio requirement in the credit monetary system The other is “base money multiplier”，and its brief connotation is the expansion （or contraction） of broad money supply caused by the central bank's base money，that is，money multiplier = broad money quantity/base money There is a close internal relationship between these two multipliers However，whether it is deposit multiplier or money multiplier，their theoretical logic is not rigorous and inconsistent with practical logic
There are three main defects in the traditional theory of money multiplier： First，when the mainstream theory focuses on the deposit multiplier of the commercial banking system，it ignores the mechanism that the central bank，as a bank，also creates money by connecting deposits and loans，and thus ignores the multiplier mechanism and deposit multiplier at the level of central bankcommercial banks Second，the logical deduction of the base money multiplier in the mainstream theory is based on the deposit multiplier of a single commercial bank，but it is directly applied to the money multiplier of the whole banking system including the central bank Third，the mainstream theory only analyzes the direct impact of changes in the statutory reserve ratio on the deposit multiplier of commercial banks It is believed that the adjustment of the statutory reserve ratio will directly affect the amount of deposits created by commercial banks，and thus affect the change of money supply and the size of money multiplier It is ignored that the funds obtained by the central bank through the adjustment of the statutory reserve ratio are not stored idle，but are used by the central bank for relending，rediscount，foreign exchange purchase and other operations of commercial banks and open market operation As a result，a deposit multiplier mechanism at the central bankCommercial bank level has been formed，making the adjustment of the statutory reserve ratio have little impact on the total amount of funds in the commercial banking system
We analyze the relationship between the two-tier banking system and the money multiplier，demonstrate the practical logic under the framework of the two-tier deposit multiplier，confirm the existence and operation logic of the twotier deposit multiplier mechanism with the actual data of China and the United States，and point out the misunderstandings of the theory of statutory deposit reserve ratio First，the statutory reserve ratio mechanism extends the regulation effect of the central bank on a single commercial bank to the entire commercial banking system，which makes a mistake of generalizing the whole Second，the statutory reserve ratio mechanism focuses on using the central bank mechanism to regulate the credit money creation of commercial banks，and does not take into account the fund operation after the adjustment of the statutory reserve ratio by the central bank Third，the statutory deposit reserve ratio mechanism is anchored in the central bank's regulation of the deposit multiplier of commercial banks in the creation of credit money，ignoring the central bank's deposit multiplier in the creation of credit money
Under the framework of twotier money multiplier mechanism of central bankcommercial banks and commercial banksclients，we propose new methods to calculate the money multiplier The first calculation method is to define the “money” in the money multiplier Km as the currency in circulation M0，and use it as the denominator of the money multiplier formula，so the circulation formula of the money multiplier is Km=（M2/M0）-1，where M2 is monetary aggregate The second calculation method is the money multiplier Kc under the condition of excluding time deposits T，then Kc=［（M2-T）/M0］-1


The Impact of “County-to-district” Reforms on Public Resource Allocation

LU Shengfeng1, 2, LIN Jingwen2, YANG Ziyi2

2024, 44(3):  49-64. 

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What does the “County-to-District” reform in China bring to counties? Does it promote shared development with big cities or lead to public resources being absorbed? In this paper，we take the spatial layout of bus stations in mainland China as an example，and empirically test the impact of the reforms of “CountytoDistrict” on the spatial allocation pattern of public resources and its impact mechanism by constructing a DID model
The results show that:（1） The reform significantly reduce the construction probability of county-level bus stations，that is，the reform plays a more “resource-grabbing” role for the county; （2） In terms of the dynamic effect of the impact，the effect has shown an increasing trend in the period; （3）The analysis of impact mechanism shows that such negative impact is not a behavioral decision of “optimal allocation on demand” due to the reduction of public service demand，but more a role of “grabbing hand” of public resources On the one hand，the reform have adjusted the spatial redistribution pattern of public resources At the provincial level，the cities affected by the policy suffered from the reform while other cities benefited from it，showing an overall redistribution pattern within the province Within the prefecturelevel city，the counties that have been changed into districts are the biggest losers in the allocation of public resources，while the other parts of the city are less affected On the other hand，the reason for the grab depends on the outcome of the game between different levels of government based on the willingness to reform and economic power
This paper is the first to evaluate the real effect of China's reform of “CountytoDistrict” from the perspective of the microdistribution of public resources At the same time，it is helpful for Chinas model selection to improve the quality of new urbanization Compared with the existing studies，the possible marginal contributions of this paper are as follows:（1） It evaluates the real effect of Chinas reform of establishing districts by eliminating counties from the perspective of microlayout of public transport resources for the first time，and it also has reference significance for Chinas model selection to improve the quality of new urbanization （2）The spatial layout characteristics of public transport services and facilities are measured based on the poi data of bus stations，and the public policy configuration is more scientifically quantified from the result end，which also provides a new way of thinking for subsequent relevant research （3） It has enriched and supplemented relevant research literature on newtype urbanization，administrative division adjustment and reform，and equalization of public services，and added new microevidence
In terms of policy implications，this study is not only an effective assessment and analysis of China's administrationdriven urbanization model，but also the first real effect assessment of Chinas reform of establishing districts by the abolishment of counties from the perspective of microresource spatial allocation，which has reference significance for Chinas urbanization reform and the practice of public service equalization reform It should be pointed out that this paper analyzes the spatial reallocation effect of public transportation resources brought about by the reform of establishing districts from the perspective of national bus station layout，which is actually only a specific research and observation perspective In fact，the connotation of public transport resource allocation is very extensive，and further from other perspectives to more comprehensively and comprehensively evaluate the effect of public resource spatial redistribution of the reform policy is a future research direction that can continue to promote



Financial Support and Sustainable Income Growth of the Low-income Groups

FAN Yanli1, 2 , CONG Shuhai3

2024, 44(3):  65-82. 

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Promoting sustainable income growth of lowincome groups is the economic foundation for rural revitalization The “complete victory” in poverty alleviation shows that fiscal funds have played a huge role in ensuring income growth for lowincome groups However， the targeted fiscal funds， such as special poverty alleviation funds from the central government， is temporary， and will change with the economic and social development of different regions The income growth heterogeneity after the reduction in financial support provides new evidence for sustainable development of lowincome groups
This study uses synthetic control method to evaluate the regional heterogeneity of rural income growth after the reduction of financial support based on countylevel panel dataset from 2006 to 2019， and further explores the reason of this regional heterogeneity The main findings of this study are as follows： First， the observed 31 counties can be divides into three types according to income growth of lowincome groups， including the rising type （about 3548%）， the declining type （about 4516%）， and the invariant type （about 1936%） Second， the reduction in financial support increases fiscal expenditure pressure of local governments Underdeveloped areas rely heavily on financial support from higherlevel governments， and local governments still have significant expenditure demands for linking up rural revitalization Third， the decreased fiscal income and increased expenditure pressure lead to an overall reduction in fiscal expenditure， which has heterogeneous effects on different types of regions On the one hand， it results in suppressing effects， where regions with relatively strong selfdevelopment capabilities still show an accelerating growth trend， albeit at a reduced rate On the other hand， it leads to restraining effects， where regions with relatively weak selfdevelopment capabilities show slowed income growth Fourth， Continuous optimization of industrial structure and infrastructure construction plays a positive role in improving selfdevelopment capabilities However， the positive effect of financial loans has not been fully released due to financial power exclusion， and low financial capacity， etc
Based on the above findings， this study proposes the following policy recommendations： First， we should tailor and implement support， guarantee， and incentive policies according to local conditions Second， we should make full use of incentive and constraint mechanisms to encourage local governments to strengthen their own financial resources construction， such as linking financial support with the growth of the local governments own financial capacity Third， we should leverage the positive role of fiscal funds in promoting the inflow of production factors into underdeveloped areas， such as highskilled labors， market capitals， hightech technologies， etc， to fundamentally enhance the selfdevelopment capabilities of the underdeveloped areas and lowincome groups


Salary Tax Incentives and Labor Income Share

ZHONG Xiaomin, ZHAN Zeying, LU Jiankun

2024, 44(3):  83-96. 

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Most of China's preferential tax policies to promote high-quality development are biased towards encouraging enterprises to use capital factors，while relatively few encourage enterprises to use labor factors Literatures find that although the former type of tax preference can improve the production efficiency of enterprises，but they usually have an unexpected negative impact on the share of labor income What is the impact of the latter type of tax preference? Clarifying this issue is of great significance for promoting common prosperity in highquality development
Based on the quasi-natural experiment of the 2008 salary tax credit reform，this paper selects the annual data of China's non-financial Ashare listed companies from 2003 to 2014，empirically analyzes how salary tax incentives affect labor income share and enterprise production efficiency by differenceindifference，and constructs a mathematical model to derive the mechanism The empirical analysis shows as follows:First，the salary tax incentive imposed by the salary tax credit reform can increase the share of labor income，and the increase rate at the sample mean is about 462% Second，the salary tax incentives promote enterprises to improve their remuneration packages，and the benefit of ordinary employees is significantly greater than that of management Third，the salary tax incentives have a significant positive impact on the production efficiency of enterprises，which is mainly manifested in improving the labor productivity and per capita performance of enterprises
The above empirical analysis results have passed a series of robustness tests，such as using alternative variable measures，conducting PSMDID regressions，and conducting placebo test，etc On the whole，the salary tax incentives imposed by the salary tax credit reform are conducive to increasing the share of labor income on one hand，and have a positive impact on the production efficiency and efficiency of enterprises on the other hand The findings implicate that tax preference encouraging enterprises to use labor factors ultimately promotes the transformation and upgrading of enterprises to a highquality and highefficiency structure，and can better balance the goals of common prosperity and highquality development
Based on the above findings，this paper puts forward the following policy suggestions for the adjustment direction and focus of China's future preferential tax policies:First，government optimize the structure of tax policies and appropriately increase the preferential tax policies to encourage the input of labor factors of market entities Second，it is necessary to use the preferential tax policies for market entities and the preferential tax policies for individual workers simultaneously Third，policy makers adhere to the system concept and enhance the synergy between preferential tax policy tools and other types of policy tools


Gender Differences，Pension Benefits and Retirement Decisions

LI Rui, JIA Minxue

2024, 44(3):  97-116. 

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China has implemented an early and genderspecific legal retirement age，with men retiring at 60，female workers at 50，and female cadres at 55 However，due to the need to alleviate the strain on pension funds，delaying retirement has become inevitable Nevertheless，many individuals are opposed to this change as it may jeopardize their own pension benefits Moreover，in China，the interplay of labor market disparities and pension system design leads to the transformation of biological and labor market differences between genders into genderbased variations in pension benefits Therefore，finding ways to incentivize individuals towards delayed retirement through system design while promoting gender equality in pension benefits is a crucial issue for Chinas delayed retirement policies
Using the 2020 CFPS microdata and individual microsimulation methods，this paper comprehensively simulates and compares three types of individual pension benefits:gross social security wealth，net social security wealth，and net present value of retirement It examines these benefits under both the current system and eight designs of delayed retirement systems The study determines the optimal retirement age based on four criteria:the accumulative value，gross peak value，net peak value，and option value Additionally，it analyzes how to incentivize individuals to choose delayed retirement through system design while promoting gender equality in individual pension benefits The paper also investigates changes in gains and losses of individual pension benefits as well as individual retirement choices in delayed retirement scenarios Lastly，it analyzes the degree and causes of gender inequality in pension benefits using OAXACARIF decomposition method
This study reveals several findings:firstly，the current system exhibits an early retirement incentive，leading individuals to opt for earlier retirement；secondly，compared to alternative delayed retirement systems，the flexible delayed retirement system with laddering incentives and penalties reduces the proportion of individuals from different genders experiencing benefit loss during delayed retirement Moreover，all individuals within this system can retire at their optimal age Lastly，there is a notable presence of gender inequality and discrimination in pension benefits under the existing system In comparison to other designs of delayed retirement systems，the flexible delayed retirement system with laddering incentives and penalties proves more effective in mitigating gender disparities and promoting gender equality in pension benefits
The findings of this paper provide valuable insights for the design of China‘s delayed retirement systemFirstly，instead of solely increasing the statutory retirement age，it is essential to incorporate incentive measures for delayed retirement into the existing system design Failing to do so would hinder the modification of retirement incentives provided by the current system design and consequently impede the successful implementation of a delayed retirement system Secondly，adopting a flexible delayed retirement system with laddering incentives and penalties respects individual choices while safeguarding pension benefits and motivating individuals to opt for delaying their retirement Thirdly，attention should be given to addressing gender inequality in pension benefits within the design of the delayed retirement system，aiming to reduce disparities and discrimination caused by its structure
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The Social Welfare Effects of the Platform's “Exclusive Dealing”：An Analysis Based on the Hotelling Model

GU Yuchen1, CAI Yuezhou2, 3

2024, 44(3):  117-134. 

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This article investigates the motivations and basic logic behind platforms implementing “exclusive dealing”， and analyzes the impact of “exclusive dealing” on social welfare and market competition landscape
During the rapid growth phase of startups，the primary goal of platforms is to expand user base rather than profit Therefore，platforms do not actively implement “exclusive dealing” However，as the gap among platforms widens，the entire market gradually transitions to a stable and mature stage of monopolistic competition among leading platforms Platforms in dominant positions typically use “exclusive dealing” to generate profits or exclude competitors Specifically，in situations of relatively intense competition，although dominant platforms implementing “exclusive dealing” may lose some multiplatform merchants，they will also cause disadvantaged platforms to lose a higher proportion of multiplatform merchants，ultimately leading to an expansion in the relative merchant ratio between dominant and disadvantaged platforms，and a squeezed market survival space of disadvantaged platforms In situations of relatively mild competition，dominant platforms may proactively reduce their number of merchants through “exclusive dealing” while increasing the fees for merchants In this process，multiplatform merchants and some merchants exclusively living on dominant platforms may migrate to disadvantaged platforms due to costbenefit considerations
Through the use of Hotelling model and numerical simulations，we find that: the implementation of “exclusive dealing” by dominant platforms harms the welfare of consumers，merchants，and overall social welfare，and in situations of relatively intense competition，it leads to a higher proportion of merchant loss for disadvantaged platforms and reduces their profits However，in situations of relatively mild competition，“exclusive dealing” may also have positive effects While enhancing the profits of dominant platforms，it may also increase the profits and number of merchants of disadvantaged platforms
According to the conclusions above，we suggest that regulatory authorities should examine the different impact of “exclusive dealing” on social welfare in different competitive environments，and accordingly improve regulatory concepts and optimize regulatory measures


New Collective Economy and Endogenous Development：A Case Study in Suzhou of Jiangsu Province

KONG Xiangzhi1, WEI Guangcheng2, XU Guangqing3

2024, 44(3):  135-146. 

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China's government has given a great deal of support to the new collective economy，but due to the lack of endogenous development impetus，the development of the new collective economy has been very ineffective This paper constructs an integrated action analysis framework based on actor network theory，dividing the endogenous development of new collective economy into five steps：problem presentation，paths integration，benefit empowerment，enlistment and mobilization，and interactive adjustment，so as to analyze the evolution mechanism of new collective economy from exogenous development to endogenous development This paper adopts a multicase analysis method，selecting Hongxing Village，Tusong Village，Qibang Village and Daijiabang Village in Suzhou City of Jiangsu Province，as typical cases to study the evolution of their activation of advantageous resources，the realization of the landlords economy，the promotion of employment，rural tourism and entrepreneurship From the perspective of case study，firstly，this paper clarifies the human organizations and material resources of typical cases to develop new collective economy Secondly，the collective economic organization，as the core actor，analyzes the problems faced by each human organization and material resources，and finds the paths of integration of endogenous development of the new collective economy，ie，to revitalize the elements of homesteads，contracted land，natural resources，and advantageous resources of the labor force to develop the new collective economy Thirdly，the collective economic organization formulates a detailed funding and profit distribution plan，which is recognized by human organizations Fourthly，the collective economic organization solves the doubts and concerns of the multiple actors and calls for the start of action Fifthly，in the specific operation process，the collective economic organization addresses the problems and challenges that arise in a targeted manner to guarantee the stable development of the new collective economy This study finds that the collective economic organizations play the role of core organization and build a multiparty winwin and close benefit linkage mechanisms by making use of advantageous resources according to local conditions，which is the core of their endogenous development This paper suggests that the new collective economy should be stimulated to develop endogenously Government departments should establish the support concept of “one policy for one village” to promote the new collective economy to build a close benefit linkage mechanism