Research On The Impact Of The Reform Of Enterprise Income Tax System On The Spatial Distribution Of FDI

At present,our country is in an important stage of transforming the mode of economic development and optimizing the industrial structure.How to effectively use foreign capital and promote the structural reform on the supply side is a very critical issue.According to the 2018 World Investment Report,China has shown a steady and sustained growth trend in the use of foreign capital.However,the distribution of FDI among the eastern,central and western regions of China is very uneven.Obviously,the spatial differences and changes of FDI are theoretical and practical issues that deserve attention.According to the current background,it is still of great practical significance to study how taxes affect FDI flows.Therefore,this paper uses municipal data to study the impact of income tax reform on the spatial distribution of FDI.In this paper,theoretical analysis and empirical analysis are combined to study.The theoretical analysis part firstly introduces the relevant concepts and theories of income tax reform and FDI spatial distribution,and explains the importance of FDI and the mechanism of tax reform on FDI spatial distribution.Secondly,the paper focuses on the current situation of spatial distribution of FDI in China,selects 263 municipal regions from2004 to 2016 to sort out the relevant data,and observes the change trend through line charts and proportion charts.In the aspect of empirical analysis,PSM-DID method is adopted,and the explained variables are respectively expressed by the natural logarithm(lnFDI_it)of new FDI and the proportion(dFDI_it)of new FDI in the national new FDI.Market size,labor cost and quality,transportation convenience,basic investment environment and the development level of the tertiary industry in the region are taken as control variables.Empirical study and put forward three hypotheses:1.In the 2008enterprise income tax reform,tax rate adjustment will significantly affect FDI.Among them,rising tax rates will have a driving effect on FDI,while falling tax rates will attract FDI.2.Under the same other conditions,the proportion of FDI in the tax rate rise area is significantly lower than that in the tax rate fall area of the income tax reform in 2008.3.The transitional policy of enterprise income tax reform in 2008 eased the driving effect of tax rate rise on FDI.The empirical results confirm that all three hypotheses are valid.In order to ensure the credibility of the results,this paper also uses the corresponding robustness test.Through the above research,it is found that:?1?the corporate income tax reform in2008 will significantly affect the spatial distribution of FDI,and the direction of tax rate adjustment has a negative correlation with the increase of FDI inflow;?2?Tax rate increase drives away FDI more than tax rate decrease attracts FDI;?3?The transitional policy in the enterprise income tax reform in 2008 eased the driving effect of tax rate rise on FDI;?4?The basic investment environment and labor costs significantly affect the spatial distribution of FDI.Combined with the research conclusion,this paper puts forward suggestions on how to attract FDI more effectively and improve the spatial distribution of FDI in China from the perspectives of adjusting tax policies and improving other factors:the central government can issue targeted adjustment policies to reduce income tax rates for regions or industries that need economic support,and can adopt transitional policies for regions that need special treatment,and use the transitional policies to alleviate the policy impact on special regions,and should pay attention to the policy orientation and effect of tax policies.Local governments can strengthen the construction of basic investment environment,improve the quality of labor force and reduce labor costs to attract FDI inflows.