VAT Rate Reductions, Changes in the Secondary Industry Share, and Urban Ecological Resilience: Evidence from Chinese Prefecture-Level Cities
Abstract
data for Chinese prefecture-level cities from 2015 to 2023, it constructs an ecological resilience index and measures policy exposure by interacting city-level VAT fiscal dependence in 2017 with the post-2018 policy dummy. The results show that, after the VAT rate reductions, cities
with higher VAT fiscal dependence experienced a relative decline in ecological resilience compared with lower-dependence cities. This finding
reflects heterogeneous differences across cities and should not be interpreted as a negative average effect of VAT reductions on all Chinese
cities. Exploratory evidence further shows that higher-dependence cities also experienced a relative increase in the secondary industry share,
which is significantly associated with lower ecological resilience. The findings suggest that tax reduction policies should be coordinated with
green industrial upgrading and urban ecological governance.
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DOI: http://dx.doi.org/10.70711/memf.v3i11.10260
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