| Abstract | Using firm-level data in 2011-2013, we estimate the effect of Chinese B2V reform by difference-in-difference model. The results show that: first, the input VAT deduction increase the fixed assets investment of enterprises in pilot areas; second, the VAT shifting result in an increase in per capita sales significantly; third, in order to guarantee the market pricing advantage, the pilot enterprises have an incentive to increase technical factors, expressed as total factor productivity significantly improve; forth, additional test found that, between different industries the level of "tax shifting" lead to significant difference between pilot enterprises investment, sales, total factor productivity; finally, the EIT preferential can strength the effect of B2V on firm’s performance. Our research imply that firms who are facing B2V should actively carry out strategic adjustment, so as to improve the "tax shifting" ability; the government should consider appropriate to reduce the enterprises "tax burden shift" cost. |