Does corporate income tax reduction prompt firm export concentration?

Analyzing the impact of changes in corporate income tax policy on firm exports provides a critical assessment of the effectiveness of tax policies in stimulating export growth. It offers insights into the influence of tax policies on intra-firm resource allocation efficiency. However, there is limited attention in the literature devoted to examining firms' export responses to these tax policy shifts, often overlooking the underlying mechanisms. This study investigates the causal relationship between reduction in corporate income tax rate and adjustment in export structure, employing a difference-in-differences approach and drawing on data from Chinese manufacturing firms between 2000 and 2013. Our findings indicate that China's corporate income tax reform in 2008 heightened the concentration of firms' export products by enhancing labor productivity and facilitating the accumulation of fixed assets. Additionally, this tax reduction expanded the range of exported products and increased the proportion of firms' core and high-technological products. [ABSTRACT FROM AUTHOR]