Research On The Impacts Of The Direct Funding And Tax Preferential Policies Of Chinese Government On Enterprise’s Value

Because of the characteristics of uncertainty, high risk of R&D activities and spillovereffects of R&D results, it inhibits the enthusiasm of enterprises to participate in the R&Dactivity in a certain extent, leading to reducing the R&D investment. In order to encourageenterprises to actively participate in R&D activity and then improve R&D investment, theChinese government has taken many policies to intervene the enterprise R&D activities,mainly by direct funding and tax preferential policies. However, can this part of the fundsachieve the desired goal of the government, increase the implementation of enterprise R&Dinvestment, eventually expanding enterprise value? What kind of incentive methods shouldthe government choose? By the time, no unanimous conclusion has been reached.This article is consisted of five chapters. The first chapter describes the backgroundand significance of the research, explains the research methods, and the structure andinnovation of this article. The second chapter gives an overview of the situation of domesticand foreign research. In this part, first of all, this article defines the important concept ofenterprise value, direct funding policies and tax preferential policies of Chinese government.And then, starts with the enterprise R&D investment, this article involve two parts of thedirect funding and tax preferential policies on the enterprise value of the literature review.The specific parts are as follows: first reviews of the effect of the direct funding and taxpreferential policies on enterprise R&D investment, then carries on the summary to theenterprise R&D investment on the enterprise value.The third chapter is the theoreticalanalysis part. First elaborates the necessity of the direct funding and tax preferential policieson enterprise R&D investment, then analysis the external mechanism and internalmechanism of how the direct funding policies and preferential tax policies influence theenterprise value, and then raise the two assumptions of this article. The fourth chapter is thepart of empirical analysis. Using panel data of2011-2013years of the small and mediumenterprise board enterprise of our country as samples, we select the enterprise scale, numberof enterprise R&D practitioners, the proportion of top ten shareholders, capital structure andgrowth of enterprise and other variables as control variables. Then according to thecharacteristics of panel data, we establish the model of fixed effect individual-meancorrected regression model with ensemble average. and empirically analyze the influence of the direct funding and tax preferential policies on enterprise R&D investment and enterprisevalue, respectively. The fifth chapter is the research results and policy recommendations, theempirical study results show that direct funding and tax preferential policies havesignificant influence on enterprise R&D investment and enterprise value, and thenaccording to the actuality of our country, put forward some suggestions to further improvethe policy of government subsidies.