Innovation is the fundamental driving force of a country’s sustainable and healthy development, and innovation mainly comes from the research and development. Therefore, how to motivate enterprises’R&D effectively is an important thing in every country. In this paper, I used the firm-level data from1999to2007to study the R&D tax incentives policy and enterprises’R&D expenditures, and also the researchers’wages. The results showed that tax incentives played an important role in promoting the enterprises’R&D, especially in enterprises which facing a low liquidity constraints smaller enterprises. With a further breakdown of the overall sample, we found a greater impact of incentives policies on high-tech industry and state-owned enterprises. It is also found that due to the increasing demand for R&D activities, enterprises had to improve internal incentives for researchers to motivate them to work more efficiently, and in the high-tech labor market, the demand for researchers led to a general rise in researchers’wages, which caused a further promotion to the R&D. |