Research On Fiscal Policies Promoting Science & Technology Innovatin In China

Innovation progress has become the main characteristic and drive force for economic and social development. The promotion of innovation, in particular in the technological innovation investment, has been taken as the most important path to improve national competitiveness in many countries. As an important government policy, public fiscal supporting has a long practice of promoting innovation by various measures of both a direct and indirect nature in developed countries, and there is considerable experience accumulated in the field of innovation policies, but much of this is not directly applicable to developing countries because of the nature of the challenges the latter are facing. In China, the explicit formulation of Science & Technology Innovation policies began about several years ago, most of the existing researches are focus on the effect of individual policy instrument or part of innovation system, which can not provide substantial reference resources for the government decision making on the policy model and the subsidized scales, there are few systematic research, especially lack of synthetically study on the net combination effect of tax expenditures, fiscal subsidies, government procurement and government venture investment.So it is a great issue and imperative necessity for us to research the effective path and policy arrangement supporting S&T innovation based on theoretical and empirical analysis approaches.The research on public fiscal policies encouraging innovation is a sophisticated project, the policy instruments including fiscal input, taxation incentive, government procurement and government venture investment, which are correlative, are the essential fiscal factors of S&T innovation system. Based on the theory of pubic goods and external effects, through the methods of positive and criterion analysis,this paper does systematic and synthetically research on the policy effects and executive conditions of the public fiscal tools in innovation system, and come to the conclusion of the theoretical model of the enterprise R&D investment model in the public fiscal framework, point out the realization path and method of Chinese S&T innovation public financial supporting system based on the reference of the experiences of innovation-oriented countries. The main structure of this paper is divided into seven chapters, the main contents of each part is as follow:The first chapter which is the introduction part of this paper describes the research backgrounds, research meanings as well as the paper structure.Chapter two is the literature review, it recalls systematically the theory of public finance, innovation as well as the public fiscal policies encouraging S&T innovation, thus to lay a foundation for further analysis.Chapter three is the illustration of relevant theories in this paper. Firstly, it studies the relevant theories both in public finance and innovation. Base on the theory of public goods and external effect, this paper analyses the rectifying effects of public finance policy in the "market failure" of innovation system, as well as the public and private mixed structure of S&T innovation system. Secondly, it analyses the characteristics and policy effects of public fiscal tools in individual and pertinent aspect. Finally, it uses the R&D investment model to judge the net impact of the combination of public fiscal policy tools from micro to macro economic level effects, and draw on the conclusion that the theoretical analysis has limitation in the long-run dynamic effects study, while need further empirical evidence.Chapter four is the empirical evidence examination for the policy effects in the S&T innovation. It provides the empirical evidence on the effectiveness of fiscal incentives to innovation in China. Firstly, the extant fiscal promoting policies have been summarized in the statistical way, and through the econometrics method to examine the R&D model under the existing policy system, as well as the taxation structure impact on enterprise R&D behaviors in China, finally the detail explanations of the econometrics analysis have been given in this chapter.Chapter five is the further discussions based on the theoretical analysis and empirical examination. It investigates the problems and shortages in the public fiscal policies, and figures out the institutional reasons which cause the inefficiency in S&T innovation system in China.Chapter six is the introduction of the international institutional experiences. It summaries the successful experiences in the fiscal subsidy, government procurement, government venture investment as well as tax incentives which are the promoting polices on S&T innovation in well developed/OECD countries, in order to provide the references for Chinese S&T innovation policy system.Chapter seven is the summary of the study, which focuses on the recommendations and suggestions about how the public fiscal policies to promote S&T innovation on the basis of the front chapters. It pointed out that the government should pay more attention to the legislation system, optimization of policy structure as well as the inducement function of innovation policy system in order to improve the efficiency of the public fiscal supporting to S&T innovation in China.