The Impact Of Income Tax Preference On R & D Investment In Pharmaceutical Industry

With the continuous development of China’s socialist economy, countries are increasingly attach importance to technological innovation. In order to encourage enterprises to increase the intensity of technological innovation, the state has promulgated a series of preferential policies. Not just subsidies, more tax concessions given to R&D investment.Under this background, in-depth study of the current R&D investment tax incentives and found that the mechanism of action and the role of corporate strength,to improve the incentive effects of tax policy, improve the tax incentives have important theoretical and practical significance.China’s pharmaceutical manufacturing industry is characterized by "high technology, investment, large risk, return good, long cycle", its R&D investment is relatively large, income tax preferential reaction is also more sensitive.In the empirical study, I selected 56 listed companies in the pharmaceutical manufacturingindustry 2010--2014 years of R&D investment and income tax-related data, and enterprise scale panel data regression analysis, income tax and corporate R&D strength of the relationship significantly, corporate income tax burden each change in one unit, will lead to changes in corporate R&D investment 12.16725 units in the opposite direction.Enterprise assets yield and asset-liability ratio of R&D investment is also significant relationship, a very good empirical result confirm the empirical assumptions, tax incentives can promote business R&D investment.In case studies, I selected Fosun Pharma which was the most of R&D investment in 2014 in pharmaceutical manufacturing. By analyzing the data of Fosun financial statements, I obtained tax incentives can promote corporate R&D investment,and empirical research conclusion of the agreement, at the same time, companies increase R&D investment and can further enhance the level of profitability, beneficial long-term development of enterprises.According to the study results can be found to improve their ability to innovate yet need government and business sectors related improvements. First, expand the scope of tax incentives. Secondly, the increase in income tax preferential links. Finally, companies should enhance self-awareness of innovation.