Incentive effect of tax preferences towards the technological innovation of enterprises--Based on China's GEM listed companies

• Published in: PloS one Vol. 18; no. 4; p. e0282692
• Main Authors: Ding, Liang, Wu, Yunfeng, Long, Junxia
• Format: Journal Article
• Language: English
• Published: United States Public Library of Science 14.04.2023; Public Library of Science (PLoS)
• Subjects: China; Computer and Information Sciences; Corporate income tax; Decision Making; Economic incentives; Economics; Efficiency; Empirical analysis; Energy industry; Engineering and Technology; Evaluation; Fiscal policy; Government; Incentives; Income tax; Income taxes; Industrial research; Innovations; Inventions; Investments; Motivation; Panel data; Physical Sciences; Policies; Preferences; Profitability; R&D; Research & development; Research & development expenditures; Research and Analysis Methods; Science Policy; Small & medium sized enterprises-SME; Social Sciences; Stock exchanges; Subsidies; Tax credits; Tax deductions; Tax exemptions; Tax incentives; Tax law; Tax policy; Tax refunds; Technological change; VAT; China
• ISSN: 1932-6203; 1932-6203
• DOI: 10.1371/journal.pone.0282692

The long R&D process, the high risk, and the externalities of technological innovation are challenges that enterprises have to meet when making decisions on R&D investment. Governments share this risk with enterprises through preferential tax policies. We summarized China's preferential tax policies related to enterprises and R&D innovation, and used panel data of listed enterprises from 2013 to 2018 in the Growth Enterprises Market (GEM) of the Shenzhen Stock Exchange to explore the incentive effects of current tax policies on the R&D innovation of enterprises. Through empirical analysis, we found that tax incentives significantly motivate R&D innovation input and promote output. In addition, we found that the income tax incentives are greater than that of the circulation tax, since the profitability of enterprise has a positive correlation with R&D investment. Meanwhile, the size of the enterprise is negatively correlated with the intensity of R&D investment.