The Effect Of Taxation On Competitiveness Of Manufacturing Industry Enterprises

It's a symbol of a nation's modernization to have a powerful manufacturing industry. Though our country is known as the"world's factory"nowadays, our manufacturing industries only have a large amount of companies, but the majority of them are lack of competitiveness on the international market. This circs urgently needs our government to working-out some policies to give a strong support for the rapid developing manufacturing industries of our country. All of the world's major industrial countries have the experience of making policies supporting the development of their manufacturing industries, and one important kind of policies is taxation policies, it can supply us important experiences for the promotion of manufacturing industry's competitiveness of our country. As an additional expenditure levied by government compulsorily, taxation increases the costs of input elements, thus raises the enterprises'prices of output products on the one hand; on the other hand, tax incentives as preferential tax policies of R&D investment can stimulate enterprises'research and development activities, thereby enhance its technical capacity and technical efficiency; moreover, the government revenue income can be used on social education, social infrastructure, social insurance and security and other aspects to bring much convenience for enterprises'operating and product activities, reducing production and operating costs, enhance its market competitiveness.As introducing the three major factors that affecting competitiveness of manufacturing industrial enterprises:"enterprise's resources","enterprise's capability", and"enterprise's external environment"in the beginning, the paper analyzes the economic environment and elements conditions of our country's manufacturing industrial enterprise firstly. Then based on the perspective of production economics, the paper measures industrial enterprises'competitiveness from the technical efficiency and allocation efficiency, and analyses the impacts of taxation on technical efficiency and allocation efficiency of industrial enterprises. On the basis of the study above, the paper estimates a game analysis on enterprises'R&D investment in the case of tax incentive exists. Finally, on the basis of analyzing of the current tax policies that promoting enterprise's innovation investment and the experiences of developed industrial countries, the paper raises the advise of tax policies to boost the competitiveness of manufacturing industrial enterprises of our country.