This paper selects the data of Shanghai and Shenzhen A-share listed non-financial and non-real estate companies in China from 2007 to 2020, to empirically analyze the relationship between the VAT burden, bargaining power and enterprises “from real to virtual”. The results show that the reduction of VAT burden can significantly restrain enterprises “from real to virtual”. Meanwhile, for overall (upstream) enterprises with weak bargaining power or downstream enterprises with strong bargaining power, the reduction of VAT burden will more significantly restrain enterprises “from real to virtual”. Moreover, for enterprises with different bargaining power in the industrial chain, the mechanism of the VAT burden restraining enterprises “from real to virtual” is also heterogeneous.

The contributions of this paper are as follows: (1) In the context of different bargaining power at different levels of the industrial chain, it examines the impact of VAT burden on enterprises “from real to virtual”, and expands the economic consequences of VAT burden and the theoretical research on the influencing factors of enterprises “from real to virtual”. (2) It explores the role path of VAT burden on enterprises “from real to virtual”, which reveals the deeper logic of the relationship between the VAT burden and enterprises “from real to virtual”. (3) It identifies the differences in the relationship between the VAT burden and enterprises “from real to virtual”, and the heterogeneity of the mechanism, which is helpful for a more comprehensive understanding of the relationship between them. (4) It provides empirical evidence at the micro level for a series of VAT policies in China to improve the imbalance between the real economy and the virtual economy.