Recently, Professor Cai Hongbo, as the first author, and his doctoral student Tang Chengjian, and Han Jinrong, an assistant researcher at the International Economic Research Institute of the University of International Business and Economics, co-authored the paper Tax Reduction Incentives, Supply Chain Spillovers and Digital Transformation was published in the 7th issue of 2023 in Economic Research, an authoritative journal in China.

At present, accelerating industrial digitalization is the focus of building a digital China, and whether government tax reduction incentives aimed at easing corporate tax burdens can help digital transformation is worth studying. Accurately identifying the target of tax reduction incentive policy is a realistic choice to actively exert the effect of tax reduction incentive under the circumstances of limited government financial resources, and it is also an inherent requirement for comprehensively improving the effectiveness of fiscal policy. From the perspective of supply chain spillover, this paper studies how to maximize the effect of tax reduction and drive the digital transformation of the whole industrial chain. It is found that the tax reduction incentive of downstream enterprises significantly promotes the digital transformation of midstream enterprises, while the tax reduction incentive of upstream enterprises has no obvious effect on the digital transformation of midstream enterprises, which is mainly related to the large difference in the monopoly capacity of upstream and downstream enterprises. The tax reduction incentive of downstream enterprises not only leads to the optimization of their own business performance, but also drives the cash flow optimization and scale expansion of midstream enterprises through supply chain transmission, promotes data sharing within the industrial chain and supply chain, and enables midstream enterprises to have sufficient funds for digital-related human capital upgrading and related investment. The transmission effect of upstream enterprises is blocked due to their strong monopoly ability. The research of this paper provides empirical evidence and policy reference for understanding and promoting enterprise digital transformation and better selecting the target of tax reduction incentive policies.

Economic Research is a comprehensive journal of economic theory sponsored by the Institute of Economics of the Chinese Academy of Social Sciences. Founded in 1955, it is recognized as the most internationally influential academic journal (Humanities and Social SSciences) in China and the “top” journal in the field of Economics in China.

Cai Hongbo, Tang Chengjian(corresponding author), Han Jin rong, Tax Reduction Incentives, Supply Chain Spillovers and Digital Transformation published in the Economic Research on page 156-173, 7th issue of 2023.

Links: https://mp.weixin.qq.com/s/uycrZXSIf2nB0DCInPtlhA

About the author

Cai Hongbo, professor, doctoral supervisor, Associate Dean of BNUBS, Director of Free Trade Zone Research Center, Director of Educational Robot Industry Research Center, Beijing Normal University. He received his PhD in Economics from the School of Economics, Xiamen University and he is a visiting scholar at Stanford University. He is a professor of "Minjiang Scholars" in Fujian Province. He is also the Secretary-General of the Service Economy and Trade Forum of the National University International Trade Cooperation Group. He is the chief expert on major projects of the National Social Science Foundation and the chief expert on the Chinese side of the EU Horizon Project. He has presided over more than 50 projects at home and abroad, such as Beijing Normal University interdisciplinary construction platform, Beijing Normal University global development strategic planning international economic organization cooperation platform, and National Natural Science Foundation. He has published more than 160 papers in Economic Research, Management World, World Economy, Chinese Industrial Economics and Journal of World Business. He was awarded the Anzijie International Trade Research Award.

Tang Chengjian is a PhD candidate of Class 2022, majoring in World Economics, BNUBS.

Han Jinrong is an assistant researcher at the School of International Economics, University of International Business and Economics. In 2023, he graduated from BNUBS, majoring in World Economics.