| The Shanghai and Shenzhen Stock Exchange have been established in 1990 and 1991.In recent years,the reform of non-tradable shares in 2005 and the sound of laws and regulations have further promoted the development of capital market in China.By the end of 2014,the scale of the capital market in China is not match with the development of the national economy and the GDP although the total market capitalization of A-shares surpassed Japan to become the world's second largest stock market and the total size of the bond market jumped the third in the world.On the other hand,there are many problems on the China's capital market.For example,the imbalance of financing structure and the low proportion of direct financing in the social financing.Indirect financing which mainly bank loans has been in a dominant position,and there are many significant differences of financing constraints between different ownership companies.Credit concentration is high,inefficient use of funds,and the difficulties of financing are the bottleneck of the development of private enterprises,especially in the small and medium-sized enterprises.In this context,enterprise income tax as the country's economic regulator has been paid attention to the theory and practice on the problem of how to improve the efficiency of resource allocation,guide the adjustment of industrial structure and solve the problem of development fund in small and medium-sized enterprises.In addition,the study on this issue is conducive to deeply understand the operational mechanism of tax shields.Finally,it provides a theoretical basis and empirical evidence for our country to use the macro adjustment and control function of the income tax to formulate the industrial policies.One study suggests that corporate income tax can affect the company's capital structure choice from two aspects.On the one hand,the income tax rate changes will affect the tax credit effect of interests,and this effect is known as the debt tax shield in the majority of the literature.The high rate of corporate will reduce the cost of debt capital and increase the enterprise debt financing motivation.However,China's capital structure is underdeveloped and financing structure is imbalance.In addition to a small number of large state-owned enterprises and local financing platform,many enterprises are difficult to meet the requirements of the development of the debt financing scale according to the laws of the market.Overall China's debt levels of real economy at a low level in the world and the interest tax(debt shield)effect have a certain degree of inhibition.On the other hand,such as fixed assets depreciation,amortization of intangible assets and other assets,which can also play the same role as the interest tax deduction,so they are called the non-debt tax shield(NDTS)in the previous literature.Compared with the debt tax shield,the biggest difference lies in that non-debt tax shield(NDTS)as non-cash expenses,it can by reducing the operating cash outflows(or treated as cash flow increase)reduce the external financing needs,thereby reducing the motivation of debt financing of of enterprises.The No.16,No.17,No.18 Party's National Congress report that taking the road of industrialization and improve the contribution rate of scientific and technological progress,improve the ability of independent innovation and building an innovation oriented country,adhere to the road of independent innovation and Chinese characteristics of the implementation of innovation driven development strategy.Accordingly,the non-debt tax shield policy has gradually become one of the important policy tools of guiding industrial development and adjusting the economic structure since 16 th congress.For example,the state has gradually increased the width and depth of R & D expenses deduction preferential in 2006(No.88 Finance and Tax [2006]),2008(No.116 State and Tax [2008])and 2015(No.119 Finance and Tax [2015]).However,although the research on debt and non-debt tax shield more fully abroad,the domestic research focused on the debt tax shield effect on capital structure(Chun Zhang and Min Liao,2007;Wu and Yue,2006;Huang and Song,2006;Zou and Xiao,2006).There are still many differences about the conclusions and further research has not yet run on non-debt tax shield policy effect.Especially since income tax reform in 2008,how to from a new perspective correct understanding debt tax shield effect existence in the Chinese capital market is lack of quantitative analysis.More important thing is that there are fewer studies on the non-debt tax shield on the impact of corporate performance mechanism and the relations between the non-debt tax shield and debt tax shields are alternative or complementary.Thus,this paper regards “New Enterprise Income Tax Law” and “Enterprise Research and Development Cost Pre-tax Deduction Management Approach(Trial)” in 2008 as breakthrough point,regards the China's Shanghai and Shenzhen A-share listed companies as the research object,to research the relationships between the debt tax shield,non-debt tax shields(NDTS),enterprise research output(patent)and firm performance.Firstly,this paper is based on the principal-agent theory,capital structure theory,productivity theory,combined with characteristics of Chinese market economic enterprises(compared with developed countries,enterprises lower leverage,concentrated relatively high degree of enterprise's equity),using DEA method to estimate the efficiency of enterprises as a proxy for firm performance variable,testing debt tax shield(debt structure)and firm performance relationship,on the basis of this,test whether the direct relationship that Jensen and Meckling(1976)debt structure influences the efficiency of enterprises is existed,and inspection business efficiency influences the debt structure of two competing hypotheses(the efficiency risk hypothesis and privilege value hypothesis).Secondly,this paper puts forward the corresponding assumptions based on the neon classical economic theory,innovation theory,and principal-agent theory and with fixed assets depreciation,amortization of intangible assets,R & D and R & D expenses deduction and the ratio of total assets as the substitute variables of non-debt tax shields,inspection of the non-debt tax shield the enterprise research output(patent)effect,and test the non-debt tax shield effect the operation mechanism of enterprise performance,which is affected by the non-debt tax shield enterprise research output(patent)to affect corporate performance,so as to verify the applicability of non-debt tax shield(NDTS)effect theory in Chinese capital market,to further test the economic effect of tax reform on adjusting the national economic structure and guiding industrial development;Then,it puts forward the corresponding hypothesis based on the transaction cost theory,incentive theory and the principal agent and theory as the foundation,to test the alternative relationship between the non-debt tax shield(NDTS)and the debt tax shield,so as to determine the complement between the two tax shields.In addition,on the basis of the above research,from the nature of the ownership of enterprise,industry differences and other point of further analysis of the existence of the relationship;finally,it uses the qualitative and quantitative analysis of the problems existing in the effect of the reform of China's tax system and economic development in China,combined with the research conclusion,to put forward the corresponding policy recommendations.By theoretical analysis and empirical tests,this paper found that the debt tax shield and non-debt tax shield(NDTS)are all affecting enterprise performance on the whole.However,the two mechanisms affecting the business performance are different,debt tax shield by debyt structure influences corporate performance,and there is an optimal debt ratio to make the enterprise production efficiency is the biggest.The non-debt tax shield(NDTS)by affecting patent output influences the enterprise performance.Second,ownership concentration has a significant impact on the enterprise performance and debt tax shield,that is,with the increase of ownership concentration,the enterprise performance first increases and then decreases,while the debt tax shield is decreased;Non-debt tax shield effect by the different nature of ownership or industry differences,namely,in the different enterprise ownership nature and characteristics of the industry,non-debt tax shield effect reflects certain difference.Finally,this paper also found that there is a certain alternative relationship between the non debt tax shield(NDTS)and debt tax shield(NDTS)under the strict financial environment of Chinese financial constraints,and the non-debt tax shield(NDTS)is an effective remedy for the problem of low debt tax shield.Based on this,the paper puts forward the main conclusions are as follows:1.Debt tax shield and enterprise performanceFirstly,the greater of the level of debt(i.e.debt tax shields)of enterprise is,the higher its performanc is,meanwhile,found that the debt tax shield has an inverted “U” relationship with the enterprise performance.That exists an optimal debt tax shield to bring business performance up to the maximum.However,China enterprises currently exists serious financing constraints.corporate debt ratio is relatively low,so the debt tax shield has not reached the optimal level,which can have a positive effect on the enterprise performance.Secondly,the higher the enterprise performance,the higher the debt level(i.e.debt tax shield),to support the efficiency risk hypothesis,this is because the higher performance will reduce the expected costs of bankruptcy and financial distress costs.At the same time,under the low level of leverage,the higher the performance of enterprises are more likely to adopt a higher debt level(i.e.debt tax shield),because the enterprise debt tax shiled is far away from the optimal level of debt tax shield;Thirdly,the larger ownership concentration of enterprises have,the higher the performance of enterprises is and lower corporate leverage rate is also,there is a whole linkages with equity concentration,debt tax shield and performance of enterprise.In general speaking,there is a remarkable positive relationship between the debt tax shield and enterprise performance,and vice versa.In general,the conclusion shows that under the environment of Chinese enterprise leverage ratio relatively low and the equity concentration relatively high at present,the debt tax shield on the performance of enterprises has a positive role in promoting,the enterprises can be appropriate to increase the debt financing to meet the production needs of operating funds.However,with the imbalance of Chinese capital market structure and indirect financing constraint strictly financial characteristics,fundamentally limits the level of corporate debt,private enterprises especially the small and medium-sized enterprises financing will be discriminated,except for a few large state-owned enterprises and local financing platform.Therefore,debt tax shield effect in China has not been fully played,or restrained in the current China.2.Non-debt tax shield(NDTS)and enterprise performance(1)Non-debt tax shield(NDTS)and enterprise patent outputFirst,there is a significant positive interrelated relations between the non-debt tax shield(NDTS)and the enterprise patent output(i.e.number of patent licensing and patent density),that is to say the greater the non-debt tax shield(NDTS),the greater of the number of patent licensing,the higher the patent density.Based on the perspective of national innovation incentives aimed at promoting more high-quality patent output,further analysis found that the non-debt tax shield(NDTS)can promote the R&D of invention patent and utility model patent,it is not obvious for design patent impact.Second,the non-debt tax shield(NDTS)effect shows some differences in different enterprise ownership nature,namely,non-debt tax shield(NDTS)for patent output in the non-state owned enterprises is more significant,which may in state-owned enterprises with other forms to improve patent output,such as bank loans,research and development subsidies and financial subsidies.Further,for the number of patent licensing,non-debt tax shield(NDTS)only to the non-state owned enterprises invention patents,appearance design and utility model patent has a significant role in promoting,but this effect is no significant in the state-owned enterprises;For patent density,in non-state owned enterprises and non-debt tax shield(NDTS)on three kinds of patent has significant role in promoting,but in the state-owned enterprises non-debt tax shield(NDTS)on patent for invention and utility model patents have a significant role in promoting,no effect on design patent.Thirdly,in the different industries,the effect of non-debt tax shield(NDTS)is different.Namely relative to the non-high tech enterprises,the non-debt tax shield(NDTS)can promotes more patent output in high-tech enterprises.Further found that for the invention patent,non-debt tax shield(NDTS)effect exists in both high and non-high tech enterprises,but in high-tech enterprises is more significant;For utility model and appearance design patent,non-debt tax shield(NDTS)effect only in high-tech enterprises is significant.On the whole,the conclusion shows that non-debt tax shield(NDTS)has a positive effect on the enterprise scientific research output,especially for the invention patent,this effect is very significant,even in different enterprise ownership nature or industries characteristics.(2)The impact mechanism of non-debt tax shield on enterprise performanceMost previous literature shows that there is a significant positive correlation between the number of patent and enterprise performance,and the conclusion is consistent.This paper not only summarizes the relevant literature research,but also uses the value correlation model to test the relationship between the patent output and enterprise value,and finds a high degree of correlation between them,thus to a certain extent shows that the non debt tax shield(NDTS)can affect the enterprise performance by influencing the patent output.Then uses the multiple regression model to test the impact of the patent output on enterprise performance,and further shows that the non debt tax shield(NDTS)can affect the enterprise performance through patent output.namely the patent output is a impact machine of non debt tax shield on enterprise performance.In general speaking,the conclusion shows that non-debt tax shield(NDTS)has a positive role on enterprise performance,and the patent output is an influence mechanism of the non-debt tax shield(NDTS)on the enterprise performance,that is to say that the non-debt tax shield(NDTS)can affect the enterprise performance by influencing the patent output.3.The non-debt tax shield(NDTS)and debt tax shieldFirstly,there is substitution relation between the non-debt tax shield(NDTS)and debt tax shield,namely,the non-debt tax shield(NDTS)is larger,the debt tax shield is lower;Secondly,further analysis found that non-debt tax shield(NDTS)on debt tax shield substitution effect exist differences on the nature of ownership,and compared to the non-state owned enterprises,non-debt tax shield(NDTS)on debt tax shield substitution effect in state-owned enterprises is more significant.This is probably because of non-state-owned enterprises subject to financing constraints strictly,its debt rate is much lower than the proportion of state-owned enterprises.Thirdly,the paper also found that,non-debt tax shield(NDTS)on the debt tax shield substitution effect reflects certain industrial differences,compared to non-high tech enterprises,non-debt tax shield(NDTS)on debt tax shield substitution effect is more significant in high-tech enterprises,indicating a running effect of the [2008]116(i.e.the R & D expenses deduction of preferential policies).In addition,to further confirm the relationship between non debt tax shield(NDTS)and debt tax shields,or analysis the other path of non debt tax shield(NDTS)affecting the business performance,this paper tests non debt tax shield(NDTS)and corporate cash flow,further confirmes the non debt tax shield(NDTS)can affect corporate cash holding.If the non debt tax shields(NDTS)level is higher,corporate cash holding level is higher,which is conducive to the promotion of enterprise value,therefore,cash holdings is another impact mechanism of non debt tax shield(NDTS)on corporate performance.On this basis,further confirmes the relationship between non debt tax shield(NDTS)and corporate performance,between non debt tax shield(NDTS)and debt levels or debt tax shield.Finally,this paper regards the enterprise performance as the dependent variable,and the debt tax shield,the non debt tax shield(NDTS)and the cross variable of them as the independent variables,further confirms substitution relation between the non-debt tax shield(NDTS)and debt tax shield.In general speaking,the conclusion of this paper shows that under the current special environment of Chinese financing constraints,non-debt tax shield(NDTS)is an effective remedy for the problem of low debt tax shield,non-debt tax shield(NDTS)has some effect of substitution on debt tax shield.In addition,the NTDS can improve the level of cash holdings,which is conducive to improving the performance of enterprises.That is to say,cash holdings is another impact mechanism of the NDTS on corporate performance.Based on the above research content and conclusion,the paper has enriched debt tax shields,non-debt tax shield(NDTS),debt structure,scientific research output(patent)and enterprise performance related literature research;provide sufficient theoretical basis and empirical evidence for the future study,the innovations embodied in the following three aspects:Firstly,this paper extends the existing research perspective.At present,the domestic research on enterprise income tax is mainly concentrated in the tax rate changes on the impact of capital structure before 2008(ZhangChun and Liao Guanmin,2007;Wu and Yue,2006;Huang and Song,2006;Zou and Xiao,2006),there is little literature to examine the effectiveness of the debt tax shield after 2008 income tax reform.In addition,a few domestic researches on the non-debt tax shield(NDTS)is mainly from the depreciation of fixed assets,intangible assets and deferred assets amortization(Xiao ZuoPing and Wu Shinong,2002;Zhang Xiaonong and Cai Jintao,2006;Hu Guoliu and Huang Jinggui,2006;Chen Guanya,2006),It is also with the lack of in-depth study on the economic consequences of R&D expenses deduction of preferential policies.Therefore,the based on the background of 2008 tax reform and Chinese financial structure imbalance,this paper quantitatively analyed existence and effectiveness of two kinds of tax shield in the Chinese capital market,meanwhile to explore the influence mechanism of the non debt tax shield(NDTS)on corporate performance,further from the perspective of different ownership nature and industry differences,respectively to study above relationship and to test the non-debt tax shield(NDTS)on debt tax shield of alternative or complementary effect,thus enrich the tax shield effect,scientific research output and firm performance of literature research.Secondly,the paper enriches the theory of evidence.Based on the agency theory and production efficiency theory,this paper proposes two competing hypotheses(the efficiency risk hypothesis and the franchise value hypothesis),and confirmes that the dominance of the two competing hypothesis has not changed in the different leverage rate level and equity concentration.Secondly,on the basis of the theories of innovation theory,principal-agent and incentive theory,and so on,the paper puts forward the viewpiont that non debt tax shield(NDTS)has the nature of ownership and industry characteristics,enrich the non-debt tax shield(NDTS)effect theory and the related literature research on factors that influence the enterprise scientific research outputs(patent),confirmed the existence of non-debt tax shield(NDTS)effect theory in the Chinese capital market,and enterprise patent outputs(patent)is a path of the non-debt tax shield(NDTS)affecting the performance of enterprises,thus obtains the related tax policy effect to achieve specific requirements.Finally,the paper enriches the literature research on substitution relation between two kinds of tax shield.based on the special institutional background,the development of capital market and the characteristics of the financing structure of China,this paper tests the existence of the non-debt tax shield(NDTS)on the debt tax shield alternative role in the capital market of China.Thirdly,the improvement measure of relevant variables.Compared with the traditional enterprise performance evaluation index,this paper uses the enterprise production efficiency inspection agency cost hypothesis.The enterprise financing decision is a complex processes,the existing theory can only explain some aspects of the financing choice of diversity and complexity.By using the production efficiency,rather than the traditional performance measure of agency cost,can accurately carry out the related research agency cost theory,to avoid noise with financial performance in the agency cost.The results also confirmed the production efficiency as a measure of agency cost is an important variable to affect the debt tax shield,and for the relationship of ownership concentration,debt tax shield and corporate performance provides new empirical evidence.In addition,the measurement of non-debt tax shield(NDTS)increases an important factor-R&D costs and the addition of 50% dedection,it is an improvement of the past non-debt tax shield(NDTS)alternative variables,so that the proxy variable is more comprehensive and practical significance.Therefore,by improving on the above variable measures,on the one hand makes the conclusion more reliable,on the other hand can promote the following research. |
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