Research On Impact Of Tax Preference On R&D Investment In High And New Technology Enterprises

Technological innovation, especially research and development (R&D), hasbecome the fundamental drive of the national economic growth and enterprise sustaineddevelopment. However, the enterprise fails to provide sufficient quantities of R&D as ithas the characteristics of inappropriability, uncertainty and indivisibility, which cancause market failure. Therefore, many countries enact a number of tax preferentialpolicies to encourage the enterprise enlargement R&D investment. New CorporateIncome Tax Law and several regulations, such as Administrative Measures for theDetermination of High and New Tech Enterprises, came into effect in2008, whichprovided munificent breakthrough preferential policies. The effectiveness of tax policieshas attracted the attention of domestic academe. Considering the fact that R&Dactivities not only run through all the whole life cycles of enterprises but also bedifferent in each life cycle stage because of the business conditions, the samepreferential policies will have a various effect on R&D activities in the different lifecycle stages. Therefore，research on R&D tax incentive from the angle of enterprise lifecycle is endued with great practical significance.Based on accountancy, finance and economics, this article reviews the influencesfor R&D investment caused by tax preferential policies in different life cycle stages.First of all, this paper introduces the prior researches on the field both abroad anddomestic, including study on the relationship between tax preference and enterpriseR&D investment, the relationship between enterprise life cycle and technologicalinnovation. Secondly, this paper expounds the basic theories: economic growth theory,tax incentive theory and enterprise life cycle theory. Thirdly, existing R&D taxincentive policies in China were introduced and those effects on R&D investmentwere analyzed, then the various influences of tax preferential policies on enterpriseR&D investment in the different life cycle stages were explored. Finally, with thepurpose of validating academic analysis, this paper selects high and new technologyenterprises from2009to2011and carries on least-squares regression analysis andfeasible generalized least squares panel regression analysis.The main conclusions of this paper are as follows:(1) tax preferential policy thegovernment settled in our country has a positive incentive effect on R&D investment;(2) R&D tax incentive in the different enterprise life cycle stages are significantly different,and the best effect occurs in the mature stage;(3) enterprise R&D investment dependson other factors more than just tax preference, such as enterprise scales and investmentopportunities, moreover, these factors differ in the different enterprise life cycle stages.According the result of the research above, this paper also puts forward suggestions tomake new policies that meet the requirements for enterprise staggered development.