Tax Arrangement and Regional Industrial Restructuring: Evidence from Panel Data in China

Table 3

Selection of index for explanatory variables.

Explanatory variable		Index design	Data description and source
Macrotax burden (mtb)			This index reflects the tax on the entire economic operation. Source: China Statistical Yearbook 2004–2013.
Turnover tax		Value added tax (RMB′10,000) (vat)	Value added tax (VAT) is a category of tax levied on the added value realized by an entity or individual selling goods, providing processing, repairs, and replacement service or importing goods. It in part reflects the effect of intermediate demand on industry segments. Source: China Statistical Yearbook 2004–2013.
		Business tax (RMB′10,000) (bt)	Business tax is a category of tax levied against the business volume realized by an entity or an individual providing taxable labor services, transferring intangible assets, or selling properties in the territory of China. This index reflects the development trend of service demand and property sales demand. Source: China Statistical Yearbook 2004–2013.
Income tax		Corporate income tax (RMB′10,000) (cit)	This index reflects the tax burden on capital factor. Source: China Statistical Yearbook 2004–2013.
		Individual income tax (RMB′10,000) (iit)	This index reflects the tax burden on labor factor. Source: China Statistical Yearbook 2004–2013.
Resource tax		Resource tax (RMB′10,000) (rt)	This index reflects the effect of resource production factors regulation on industrial restructuring. Source: China Taxation Yearbook 2004–2012.
Property tax	Tax burden on the secondary industry ()		The index reflects the tax burden on development of the secondary and the tertiary industries, respectively. Source: China Statistical Yearbook & China Taxation Yearbook 2004–2012.
	Tax burden on the tertiary industry ()
Control variable	Technology progress (tp)		This index measures the effect of technology progress on industrial restructuring. Source: China Statistical Yearbook on Science and Technology 2004–2013.
	Consumption structure (cs)		This index interprets the guiding role of government expenditure in economic operation and optimization of the industrial structure. Source: China Statistical Yearbook 2004–2013.
	Investment structure (is)		The investment structure reveals the effect of government investment demand on the industrial structure and interprets the impact of “crowding-out effect” of government investment on the industrial structure. Source: China Statistical Yearbook 2004–2013.
Regional differences		Dummy variable	When the sample is eastern provinces, = 1; when it is a central or western province, = 0.