The Impact Of The R&D Expense Deduction Policy On R&D Investment In The Medical Industry

The report of the 19 th CPC National Congress pointed out that innovation is the first driving force to lead development,strengthen the construction of national innovation system and strengthen strategic scientific and technological forces.As the guarantee of people’s livelihood and well-being,the medical industry plays an important role in our life.Because China still relies on imports of many medicines and medical devices,in order to get rid of this constraint,the government emphasizes the need to improve the quality of China’s independently developed drugs and improve China’s medical innovation level,and proposes to replace the "generic" strategy with the "innovative drug" strategy.Therefore,many preferential policies have been issued to support the medical industry.Under the guidance of the national policy,the medical industry needs to improve its R &D and innovation ability.However,the R & D and innovation of the medical industry has the problems of long cycle,large investment and high risk.If only relying on the market to promote the medical industry to increase R & D efforts,there may be great difficulties.In order to improve the awareness of independent R & D and innovation of Chinese enterprises,the government has formulated targeted financial subsidies or preferential tax policies to support enterprises,Among them,the introduction of R & D expense plus Deduction Policy for R & D activities carried out by enterprises is a common measure in the preferential tax policy,but there are still some deficiencies in the formulation and actual implementation of the policy,and whether the preferential policy is related to the size,growth ability and profitability of enterprises to promote R & D investment,and whether the R & D innovation can be strengthened according to the original intention of policy formulation,Further discussion is needed.Therefore,this thesis mainly analyzes the effect of R & D expense plus Deduction Policy on R & D investment in the medical industry under this background.This thesis mainly includes five parts.The first part mainly analyzes the background,significance and research status at home and abroad.By reading the relevant literature on the impact of preferential tax policies on enterprises in all aspects,this thesis combs the research directions of scholars at home and abroad,which are mainly divided into three categories.The research direction of the first category of scholars is mainly to analyze the impact of the R & D expense plus Deduction Policy on the development ability and performance level of enterprises;The second kind of scholars choose high-tech enterprises or manufacturing in a broad sense when analyzing the R & D expense plus Deduction Policy,and do not subdivide the research into the medical industry;The third kind of scholars analyze the policy itself and put forward targeted suggestions on the shortcomings of policy formulation and implementation.It is found that there is less literature dedicated to the analysis and Research on the relationship between the addition and Deduction Policy of R & D expenses and the medical industry.Therefore,this thesis studies the impact of the addition and Deduction Policy of R & D expenses on the R &D investment of the medical industry from the micro level,hoping to make up for the research vacancy in this regard.The second part mainly introduces the relevant economic theories needed in this thesis,including market failure theory and endogenous growth theory.The market failure theory further analyzes the positive externality,risk and information asymmetry.Then,from the perspective of affecting the total amount and cost of R & D investment,this thesis analyzes the action mechanism of R & D expense plus Deduction Policy on R & D investment in medical industry.The third part analyzes the current situation of R & D investment in China’s medical industry and the development process and problems of R & D expense plus Deduction Policy.Firstly,according to the public data of the statistical yearbook,this thesis analyzes the overall situation of China’s industry wide R & D investment and the development trend of the total R& D funds from 2010 to 2020.From the perspective of scale,China’s total R & D funds are growing steadily,and the intensity of R & D investment is becoming higher and higher,indicating that all walks of life in China pay more and more attention to R & D innovation.Secondly,according to the R & D expenditure data of China’s medical industry from 2011 to2020,the R & D expenditure and the ratio of R & D expenditure to business income show a rising trend.From the classification of the medical industry,the largest R & D expenditure in the medical industry is the pharmaceutical manufacturing industry.Finally,by combing the development process and shortcomings of China’s R & D expense plus Deduction Policy,it provides ideas for the subsequent revision and improvement of the policy.The fourth part is the empirical analysis of this thesis.This part selects the public data of Shenzhen and Shanghai A-share listed medical enterprises from 2015 to 2020,relies on stata16 and Excel to analyze 994 groups of effective samples to build a model,takes the R & D investment of the medical industry as the explanatory variable,and takes the asset scale and asset liability ratio as the control variables to study the impact of the R & D expense plus Deduction Policy on the R & D investment of the medical industry,In the last part,the explained variables are replaced and the robustness test is carried out to make the conclusion more convincing.The empirical results effectively confirm the hypothesis of this thesis.The fifth part is the research conclusions and policy recommendations of this thesis.The empirical results show that the R & D expense plus deduction policy can indeed improve the R& D innovation of China’s medical industry,and the larger the enterprise scale and the better the enterprise growth ability,the more obvious this effect is.Finally,it puts forward suggestions to improve relevant policies from the two levels of policy formulation and implementation.