| China is undergoing a spectacular growth in economy since the 1990s. This fact implies that the policy of reforming and opening has achieved great progress and huge success. In 2015, the GDP of China reached 67,670.8 billion Yuan, ranking in the second place in the world, and has increased by 6.9% over the year of 2014. Although the growth rate has fallen by 0.4% compared with the growth rate of 2014 over 2013, it is still far higher than the average of the world. A lot of theories and facts has proved that international trade, especially the export trade is the main driving force of China’s economic growth. The development of international trade not only benefits the growth of the economy, but also optimize the industrial structure of China. Thus, as the important tools of the government to control the development of international trade, different trade policies has raised more and more public concerns and become one of the frequently-discussed fields in academic research. Export tax rebate (Hereinafter referred to as ETR) policy is now recognized as one of the most important part among all trade policies, therefore conducting a research about ETR policy and its impacts appears to be necessary and meaningful.The researches about ETR policy for now mainly focus on the following aspects: the effects of ETR policy on the growth of export, the effects on the industrial structure adjustment and optimization, and the effects on domestic employment levels and other social welfare levels. It has been widely acknowledged that ETR policy can affect the amount of firms’export motivation, which only reveals the direct effect of ETR policy on intensive margin of firms’export, and there already exists a large number of literatures examining this direct effect of ETR policy on national export:scholars have given enough evidence on how an increase in ETR rate can increase the amount of export through decreasing firms’ variable cost. In fact, the ETR policy has both direct effects and indirect effects on the intensive margin of export products. The indirect effect means that ETR policy can affect the production scale of the firm by decreasing the firms’ variable cost, which results in the change of the demand for the inputs including labors, thus changing the labor wage of the firm, even the industry. All of the above factors will change the variable cost of production in return, and affect firms’ decision of whether to export or not and the amount of export at last. The existing of indirect effect makes the same ETR policy form different impacts in different regions of China. This fact is very important, however it doesn’t receive enough concern.This paper conducts a review of literatures about the effects of ETR policy on export performance, and makes the point that ETR policy has both direct effect and indirect effect on export intensive margin. We use the Chinese firm-level data during 2002-2006 in order to empirically examine the existing of the two effects above. The regression result shows that the ETR policy does have the positive direct effect and negative indirect effect on export product’s intensive margin at 1% significance level. Proving the existence of the negative indirect effect of ETR policy is the main academic contribution of this paper. Considering that (a.) the export firms in processing industry do not own the same characteristics with the export firms in manufacturing industry, and (b.) the possible existence of reversing causal relationship between ETR policy and the export intensive margin (i.e. The export condition of some product and industry may force the government to change the ETR policy for some reasons.), therefore, we make a series of robustness tests, including excluding processing trade firms, using instrumental variables to control endogeneity and selecting more appropriate samples. After these tests, regression results still prove to be robust, which indicates that the ETR policy has a positive direct effect on product’s export intensive margin, while 1% increase in ETR rate will cause a 0.19% increase of intensive margin at 1% significance level. At the same time, the regression results indicate that the ETR policy also has a negative indirect effect on intensive margin, while 1% increase in ETR rate will cause intensive margin to decrease by 0.02% at 1% significance level. This paper explains the reason and logic behind the statistic results:(a.) there lies huge differences in industrial structure and export dependence among different regions in China, and (b.) there exists costs when labor flows across regions in China.Both the explanation account for why the ETR policy has different effect on different regions. On the basis of the empirical analysis, this paper also puts forward some policy suggestions... |
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