Analysis Of China’s Tax Incentives’ Effect On Enterprise Technological Innovation Based On The Provincial Panel Data

Technological innovation has been very important for facilitating economic industry development and improving national competitiveness. Nowadays, Chinese economy has entered the New Normal economy, which means the slowdown of economic growth, transformation of economic boost engine and strategic changes of economic developments. Standing at this new crossroads, Building a profound innovation system is one of the China’s urgent missions. As an important participant in the economy, enterprise’s technological innovation activities has been paid more attention recently. Meanwhile, taxation has been playing important role on the national macroscopic readjustment and control. Tax incentives has been used actively in many countries and areas for boosting enterprise technological innovation and improving the whole country’s innovation level. By theoretical and empirical analysis, this study focus on the effect of tax incentives on enterprises’technological innovation from taxation perspective and will provide meaningful information for improving our country’s technological innovation abilities.This project used calculative approaches based on national policies and data, which was elucidated in 5 chapters. This thesis introduced the background and meaning of research, the concept of enterprise technological innovation and tax incentives, the mechanisms of tax incentives’ effect on enterprise technological innovation as well as the policies of China’s tax incentives. We use empirical analysis to study the effect of tax incentives on enterprise technological innovation. And systematic suggestions towards this project was provided relatively based on our results.Chapter 1 introduced the background and current meaning of China’s tax incentives and enterprise technological innovation. Basic concepts were introduced by collecting information from global literatures and reviews. Research strategies and approaches were elucidated.Chapter 2 analyzed the effect of tax incentives on enterprise technological innovation from theoretical perspective. Tax incentives encourages enterprises increase their technological innovation by changing enterprises’ resource allocation, reducing capital cost and influencing supply and demand of companies’ human resource so as to decrease the potential risk of enterprise technological innovation.Chapter 3 introduced our country’s policy on tax incentives and induced the main features of tax incentive policy.Chapter 4 studied China’s tax incentives policy on enterprise technological innovation by calculative approaches. This study used a two-way fixed effect model and instrumental variables to analyze the provincial panel data.Chapter 5 provided systematic suggestions on tax legislation, optimizing tax regulations, emphasizing personal tax incentives and coordination of finance and taxation based on empirical analysis results and problems encountered in policies.