Research On Multinational Supply Chain Purchasing Decision Based On Import And Export Value-added Tax Refund Under Information Asymmetry

With the deepening of economic globalization and the pace of internationalization of enterprises accelerates,the economic ties of countries around the world have become increasingly close In order to follow the trend of economic globalization and grasp the opportunity of international development,and transnational operations have become a common economic phenomenon in the world economy.Multinational firms(MNFs)have played an increasingly important role in the world economic arena and have increasingly become the core force of economic globalization.Because their capital can flow on a global scale,MNFs need to face the complicated and diverse market economy environment of countries when they operate internationally.For example,different countries have different tax rules and related policy requirements,and the state economic situation changes with time.The tax problem has brought a heavy burden to MNFs,so international tax planning has received more and more attention from researchers at domestic and abroad.The problem of reasonable tax avoidance has gradually become an important issue that cannot be ignored in the management of supply chain.With the continuous development of Chinese economy,especially after China officially joined the WTO,China has rapidly transformed into one of the most promising economic powers in the world.In the past few decades,the supply chain capabilities of China have grown rapidly,and it is now has fully capable of providing MNFs with a much more efficient vertically integrated supply chain.China has became a very attractive market for MNFs at the moment.MNFs around the world have stepped up their pace of entering the Chinese market,and a large number of MNFs have come to China for procurement,production and sales.The changes in the procurement environment in China have made the importance of MNFs' procurement management in the supply chain to be widely recognized and promoted to the strategic decision-making level of enterprises.Studying the procurement management of MNFs in the supply chain environment,systematically making purchasing decisions.Therefore,effective control of procurement and supply chain costs is the only way for MNFs to survive,profit and develop.A set of unique import and export value tax policy for China has an important impact on the operations of MNFs in China.Among them,the export tax rebate rate,which is one of the important policy tools for the government to regulate trade scale and adjust the industrial structure,playing a key role in the procurement decision of MNFs in the supply chain.The export tax rebate rate is an economic regulation measure that returns part or all of the domestic tax already levied on export commodities to exporters in accordance with international practice,it can effectively reduce the cost of export commodities,promote the upgrading of industrial structure,optimize the structure of export products,and reduce Chinese dependence on foreign trade enterprises.MNFs in China have faced with a living environment that is subject to the adjustment of the VAT rebate rate.It is necessary to change the business model in a timely manner,accelerate its own changes,and optimize the management process to formulate procurement plans and business decisions.The effective tax supply chain has gradually become a field of concern for scholars at domestic and abroad.The current research focuses on the following aspects:The first is to develop business and financial strategies to hedge against financial risks such as market uncertainty and exchange rate fluctuations;The second is the study of the transfer price strategy;The third is about the research on the decision-making behavior of MNFs in the supply chain.This paper highlights the importance of developing a company's global supply chain management decisions while considering international tax rules.Based on the background that MNFs purchase raw materials and manufacture final products in China,reasonable tax avoidance can be achieved by making effective procurement decisions.The manufacturer MNF have a three-tier supply chain with a raw component supplier(SP)and a contract(CM).First of all,this paper analyzes the impact of Chinese import and export value-added tax policy on the purchasing strategies of MNFs in the global business environment and the profits of various entities in the supply chain.Secondly,this paper analyzes the potential of CMs to further reduce the purchase price,that is,the CM can negotiate with the SP according to the aggregate order in the market and thus reduce the raw material price.In order to further analyze the behaviors of the supply chain to avoid the financial and operational risks brought by taxation under the asymmetric information,this paper introduces the level of effort as a decision variable.lt is important to consider establishing a principal-agent model in the supply chain under the condition that the import and export VAT refund rate of China changes frequently.The principal-agent model in the supply chain indirectly controls the efforts of CMs through incentive strength,and develops a more effective supply chain procurement management mechanism for MNFs.Studies have shown that some unique factors in the global supply chain environment are potentially affecting the global profits of MNFs,such as market structures with different scales and competitive characteristics,and different tax rules for different markets.The reduction in the VAT rebate rate will lead to higher incentive wages for MNFs,and CMs will pay higher levels of effort.At this time,the after-tax profits of multinational companies will increase.When MNFs try to balance the advantages and disadvantages of cooperation with Chinese local companies in the selected procurement mode and at the same time in the domestic market in China,the size of the foreign market will not increase to a certain extent after adopting the principal-agent model,if the size of foreign markets does not increase to a certain extent,their fierce competition in the domestic market may reduce their global profits.Finally,this paper analyzes the impact of VAT policies on various entities in the supply chain and provides reasonable advice for MNFs1 procurement decisions in the supply chain,and to assist the government to carry out macro-control and put forward effective supply chain management mechanism and suggestions on the adjustment of VAT rebate rate.Management insights based on such results may be useful for MNFs that develop tax effective supply chain strategies in an increasingly volatile business environment in the region.This paper analyzes the theoretical results by numerical examples.