Xuepeng Liu

Learn More
This Working Paper should not be reported as representing the views of the IMF. The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate. Based on a survey that(More)
There is almost no support for the proposition that capital is attracted to low wages from firm-level studies. We examine the location choices of 2884 firms investing in China during 1993-1996 to offer two main contributions. First, we find that the location of labor-intensive activities is highly elastic to provincial wage differences. Generally,(More)
We study the relationship between participation in free trade agreements (FTAs) and the sustainability of democracy. Our model shows that FTAs can critically reduce the incentive of authoritarian groups to seek power by destroying protectionist rents, thus making democracies last longer. This gives governments in unstable democracies an extra motive to form(More)
China exhibits above average savings and below average consumption as shares of total economic activity when compared with other countries. At the same time, to create more balanced growth at home and rebalance key bilateral trade and capital flow relationships, China's leadership is trying to increase domestic demand. To complement studies that investigate(More)
Many production firms use intermediary trading firms to export indirectly. This paper investigates the tax evasion motive through indirect trade, using Chinese export data at transaction level. We provide strong evidence that, under the partial export VAT rebate policy of China, production firms can effectively evade value-added taxes (VAT) by(More)