How Does the PriceBased Reform of Resource Taxes Affect Enterprises Profitability?——A Case Study of Crude Oil and Natural Gas
- SHAO Zhuqiong, ZHANG Zhongxiang
- SHAO Zhuqiong (Fudan University, 200433)ZHANG Zhongxiang (Tianjin University, 300072)
To avoid waste in exploration and use of resources while alleviating the financial burden of local governments, the Chinese central government started a pilot reform on resource taxation in Xinjiang, levying resource taxes on crude oil and natural gas by price rather than by existing extracted volume as from June 1, 2010. This reform was then applied nationwide as from November 1, 2011. To assess the effect of the resource tax reform, this paper starts from the change of effective tax rate of resources before and after the reform to construct a theoretical production model and investigates the upstream and downstream enterprises, respectively. Different from other studies, this paper creatively combines the different positions of enterprises in the petroleum and petrochemical industry chain and the different effect mechanisms of resource tax reform on enterprises. In the empirical part, the paper takes the resource tax reform as a quasi-natural experiment and estimates the difference-in-differences model. The paper finds that the resource tax reform significantly reduces the profitability of the upstream enterprises, while having no significant effect on the profitability of downstream enterprises. The impact of the resource tax reform is robust and does not change drastically with variations in estimation methods, the control groups, the sample periods, the sizes of the enterprise, the data resources, and so on.
- Resource Tax Reform, Upstream and Downstream Enterprises, Profitability, Quasi-natural Experiment, Difference-in-Differences Model