Zhiyong An - Academia.edu (original) (raw)
Papers by Zhiyong An
Journal of Public Finance and Public Choice, 2019
This article examines the causal effect of debt decentralisation on the budget constraint of subn... more This article examines the causal effect of debt decentralisation on the budget constraint of subnational governments. China’s debt decentralisation reform of 2011 authorised four provincial-level units to issue debt on their own, but not the remaining ones. Using data on the budgetary expenditure and revenue of Chinese subnational governments from 2009 to 2014, we estimate the effect of the reform with a difference-in-differences approach, with those four provincial units as the treatment group and the others as the control group. Our findings suggest that debt decentralisation can help harden the budget constraint of subnational governments.
International Tax and Public Finance
The Economists’ Voice
We have identified two general lessons, suggested from the 2019 personal income tax reform of Chi... more We have identified two general lessons, suggested from the 2019 personal income tax reform of China, regarding third-party reporting, tax compliance, and tax incidence. First, third-party reporting is an effective mechanism to enforce tax compliance. Second, tax evasion can affect tax incidence. We argue that these two general lessons are important for both academic researchers and policymakers.
The B.E. Journal of Economic Analysis & Policy
We take advantage of China’s relaxation in January 2014 of its “one-child” family planning policy... more We take advantage of China’s relaxation in January 2014 of its “one-child” family planning policy to study the causal relationship between expected future demographic changes and firms’ stock returns. We use an event study method as our identification strategy and employ data from Chinese stock markets to implement the analysis. We find consistent evidence suggesting that expected demographic changes exert statistically and economically significant effects on firms’ stock returns. We address four potential threats about the validity of our empirical design and argue that our conclusion is not China-specific, but a generic lesson portable to developed countries.
International Tax and Public Finance
Journal of Institutional and Theoretical Economics JITE
Journal of Multinational Financial Management
Annals of Economics and Finance, 2009
We accomplish two tasks to characterize aggregate price stickiness in this paper. First, we endog... more We accomplish two tasks to characterize aggregate price stickiness in this paper. First, we endogenize β, the fraction of the firms keeping their price unchanged following a money supply shock in the near-rationality model (Akerlof and Yellen, 1985) by introducing a distribution of price-adjustment barriers among the firms into the near-rationality model. Second, as β can be considered an indicator of aggregate price stickiness by its definition, the endogenized β enables us to characterize aggregate price stickiness by studying its properties. We show that: (1) lim ε→0 β(ε) = 1; (2) dβ dε˛ε =0 = 0; and (3) the possibility of multiple equilibrium values of β, where ε is the fraction change in money supply. for helpful discussions and valuable comments.
International Tax and Public Finance, 2012
Public Finance Review, 2010
This article integrates the theory of welfare stigma and the theory of optimal income taxation. W... more This article integrates the theory of welfare stigma and the theory of optimal income taxation. We study optimal income taxation and an optimal welfare program within a unified framework while taking welfare stigma into account. In our framework, the government is assumed to have two policy instruments, namely general income taxation and a welfare program. Individuals are assumed to be
Journal of Housing Economics, 2013
Empirical evidence on the relationship between real estate price and selling time (timeon-market ... more Empirical evidence on the relationship between real estate price and selling time (timeon-market (TOM)) is mixed as to whether the price-TOM relationship is positive or negative. Competing theories also suggest opposite predictions about TOM's impact on selling price. The article examines the price-TOM relationship against the background of varying market conditions and highlights the impact of these conditions on the relationship. The theoretical analysis extends search theory and Lazear's model to changing market conditions and reconciles their predictions on the relationship. The empirical analysis refines the investigation of the price-TOM relationship by revealing the cross-effect of market conditions and TOM on price. The findings confirm that the price-TOM relationship can indeed be positive or negative depending on these conditions. However, except for the case of an extremely bad market, the relationship is generally positive. This outcome occurs because search effort (indicated by TOM) brings significant price benefit that is large enough to offset all but the worst market price declines. Additional analysis confirms that the findings are not altered by the potential endogeneity between price and TOM.
The Journal of Fixed Income, 2010
Journal of Corporate Finance, 2012
China's new Corporate Income Tax Law was passed in March 2007 and took effect on January 1, 2008.... more China's new Corporate Income Tax Law was passed in March 2007 and took effect on January 1, 2008. It terminated the dual corporate income tax regime by removing the preferential tax treatments offered to foreign investment enterprises (FIEs) and unifying the corporate income tax regime for FIEs and Chinese domestic enterprises (DEs). This paper uses a difference-in-differences approach to determine whether FIEs responded to the law by raising debt ratios. Employing the Chinese Industrial Enterprises Database from 2002 to 2008 to implement the analysis, we find that FIEs have responded to the law by raising debt ratios; the treatment effect is larger for Hong Kong-Macau-Taiwan (HMT) investment enterprises than for other FIEs, which implies that HMT investment enterprises are more sensitive and more responsive to the removal of the preferential tax treatments than other FIEs; and the treatment effect by restricting the control group to State-Owned Enterprises (SOEs) is less than that by restricting the control group to Private-Owned Enterprises (POEs), which is consistent with the perception that SOEs might enjoy more favorable treatments from the Chinese government than POEs. All three findings are consistent with the tax-based theories of capital structure, and hence we conclude that taxation plays an important role in the choice of capital structure. We argue that our conclusion is not Chinaspecific, but a general lesson for modern finance theory and is portable to developed countries.
International Tax and Public Finance, 2012
Housing Policy Debate, 2012
Recent studies provide evidence that the government-sponsored enterprises (GSEs) might not be jus... more Recent studies provide evidence that the government-sponsored enterprises (GSEs) might not be justified under a rigorous and innovative framework of cost-benefit analysis. The policy implication is that the GSEs might have finished their historical mission of building the secondary mortgage market, but now with a mature secondary mortgage market, they might not be beneficial any more – maybe it is
Economics & Politics, 2013
Economic Modelling, 2013
We take an alternative approach to income taxation in this paper. We view the income tax schedule... more We take an alternative approach to income taxation in this paper. We view the income tax schedule as the outcome of a voting process, rather than the optimal choice of a "benevolent social planner". We show that it is very likely for majority voting to lead to the adoption of a regressive income tax schedule, depending on the per capita government revenue requirement and the mean productivity of the population, which is in sharp contrast with the result derived from the traditional "benevolent social planner" approach to income taxation; and that given the adoption of a regressive income tax schedule, the income tax schedule would become less regressive as the ratio of the per capita government revenue requirement over the mean productivity of the population increases. Our work might shed some light on both the prevalent adoption of regressive state tax systems and the cross-state difference in terms of tax systems.
Public Finance Review, 2010
This article integrates the theory of welfare stigma and the theory of optimal income taxation. W... more This article integrates the theory of welfare stigma and the theory of optimal income taxation. We study optimal income taxation and an optimal welfare program within a unified framework while taking welfare stigma into account. In our framework, the government is assumed to have two policy instruments, namely general income taxation and a welfare program. Individuals are assumed to be
Journal of Public Finance and Public Choice, 2019
This article examines the causal effect of debt decentralisation on the budget constraint of subn... more This article examines the causal effect of debt decentralisation on the budget constraint of subnational governments. China’s debt decentralisation reform of 2011 authorised four provincial-level units to issue debt on their own, but not the remaining ones. Using data on the budgetary expenditure and revenue of Chinese subnational governments from 2009 to 2014, we estimate the effect of the reform with a difference-in-differences approach, with those four provincial units as the treatment group and the others as the control group. Our findings suggest that debt decentralisation can help harden the budget constraint of subnational governments.
International Tax and Public Finance
The Economists’ Voice
We have identified two general lessons, suggested from the 2019 personal income tax reform of Chi... more We have identified two general lessons, suggested from the 2019 personal income tax reform of China, regarding third-party reporting, tax compliance, and tax incidence. First, third-party reporting is an effective mechanism to enforce tax compliance. Second, tax evasion can affect tax incidence. We argue that these two general lessons are important for both academic researchers and policymakers.
The B.E. Journal of Economic Analysis & Policy
We take advantage of China’s relaxation in January 2014 of its “one-child” family planning policy... more We take advantage of China’s relaxation in January 2014 of its “one-child” family planning policy to study the causal relationship between expected future demographic changes and firms’ stock returns. We use an event study method as our identification strategy and employ data from Chinese stock markets to implement the analysis. We find consistent evidence suggesting that expected demographic changes exert statistically and economically significant effects on firms’ stock returns. We address four potential threats about the validity of our empirical design and argue that our conclusion is not China-specific, but a generic lesson portable to developed countries.
International Tax and Public Finance
Journal of Institutional and Theoretical Economics JITE
Journal of Multinational Financial Management
Annals of Economics and Finance, 2009
We accomplish two tasks to characterize aggregate price stickiness in this paper. First, we endog... more We accomplish two tasks to characterize aggregate price stickiness in this paper. First, we endogenize β, the fraction of the firms keeping their price unchanged following a money supply shock in the near-rationality model (Akerlof and Yellen, 1985) by introducing a distribution of price-adjustment barriers among the firms into the near-rationality model. Second, as β can be considered an indicator of aggregate price stickiness by its definition, the endogenized β enables us to characterize aggregate price stickiness by studying its properties. We show that: (1) lim ε→0 β(ε) = 1; (2) dβ dε˛ε =0 = 0; and (3) the possibility of multiple equilibrium values of β, where ε is the fraction change in money supply. for helpful discussions and valuable comments.
International Tax and Public Finance, 2012
Public Finance Review, 2010
This article integrates the theory of welfare stigma and the theory of optimal income taxation. W... more This article integrates the theory of welfare stigma and the theory of optimal income taxation. We study optimal income taxation and an optimal welfare program within a unified framework while taking welfare stigma into account. In our framework, the government is assumed to have two policy instruments, namely general income taxation and a welfare program. Individuals are assumed to be
Journal of Housing Economics, 2013
Empirical evidence on the relationship between real estate price and selling time (timeon-market ... more Empirical evidence on the relationship between real estate price and selling time (timeon-market (TOM)) is mixed as to whether the price-TOM relationship is positive or negative. Competing theories also suggest opposite predictions about TOM's impact on selling price. The article examines the price-TOM relationship against the background of varying market conditions and highlights the impact of these conditions on the relationship. The theoretical analysis extends search theory and Lazear's model to changing market conditions and reconciles their predictions on the relationship. The empirical analysis refines the investigation of the price-TOM relationship by revealing the cross-effect of market conditions and TOM on price. The findings confirm that the price-TOM relationship can indeed be positive or negative depending on these conditions. However, except for the case of an extremely bad market, the relationship is generally positive. This outcome occurs because search effort (indicated by TOM) brings significant price benefit that is large enough to offset all but the worst market price declines. Additional analysis confirms that the findings are not altered by the potential endogeneity between price and TOM.
The Journal of Fixed Income, 2010
Journal of Corporate Finance, 2012
China's new Corporate Income Tax Law was passed in March 2007 and took effect on January 1, 2008.... more China's new Corporate Income Tax Law was passed in March 2007 and took effect on January 1, 2008. It terminated the dual corporate income tax regime by removing the preferential tax treatments offered to foreign investment enterprises (FIEs) and unifying the corporate income tax regime for FIEs and Chinese domestic enterprises (DEs). This paper uses a difference-in-differences approach to determine whether FIEs responded to the law by raising debt ratios. Employing the Chinese Industrial Enterprises Database from 2002 to 2008 to implement the analysis, we find that FIEs have responded to the law by raising debt ratios; the treatment effect is larger for Hong Kong-Macau-Taiwan (HMT) investment enterprises than for other FIEs, which implies that HMT investment enterprises are more sensitive and more responsive to the removal of the preferential tax treatments than other FIEs; and the treatment effect by restricting the control group to State-Owned Enterprises (SOEs) is less than that by restricting the control group to Private-Owned Enterprises (POEs), which is consistent with the perception that SOEs might enjoy more favorable treatments from the Chinese government than POEs. All three findings are consistent with the tax-based theories of capital structure, and hence we conclude that taxation plays an important role in the choice of capital structure. We argue that our conclusion is not Chinaspecific, but a general lesson for modern finance theory and is portable to developed countries.
International Tax and Public Finance, 2012
Housing Policy Debate, 2012
Recent studies provide evidence that the government-sponsored enterprises (GSEs) might not be jus... more Recent studies provide evidence that the government-sponsored enterprises (GSEs) might not be justified under a rigorous and innovative framework of cost-benefit analysis. The policy implication is that the GSEs might have finished their historical mission of building the secondary mortgage market, but now with a mature secondary mortgage market, they might not be beneficial any more – maybe it is
Economics & Politics, 2013
Economic Modelling, 2013
We take an alternative approach to income taxation in this paper. We view the income tax schedule... more We take an alternative approach to income taxation in this paper. We view the income tax schedule as the outcome of a voting process, rather than the optimal choice of a "benevolent social planner". We show that it is very likely for majority voting to lead to the adoption of a regressive income tax schedule, depending on the per capita government revenue requirement and the mean productivity of the population, which is in sharp contrast with the result derived from the traditional "benevolent social planner" approach to income taxation; and that given the adoption of a regressive income tax schedule, the income tax schedule would become less regressive as the ratio of the per capita government revenue requirement over the mean productivity of the population increases. Our work might shed some light on both the prevalent adoption of regressive state tax systems and the cross-state difference in terms of tax systems.
Public Finance Review, 2010
This article integrates the theory of welfare stigma and the theory of optimal income taxation. W... more This article integrates the theory of welfare stigma and the theory of optimal income taxation. We study optimal income taxation and an optimal welfare program within a unified framework while taking welfare stigma into account. In our framework, the government is assumed to have two policy instruments, namely general income taxation and a welfare program. Individuals are assumed to be