A Study Of Preferential Policy Of Tax Under Differential Istitutional Invironment Inciting R&D Input

Today, technological innovation capability for the economic development of a country plays a crucial role, for businesses and innovative products with huge profit margins, thus increasing the level of R&D spending to improve their ability to innovate are also a lot of the company’s strategic development goals. But the innovative nature of the product there is a public good and external characteristics, and therefore the level of corporate R&D spending will lead to private R&D spending levels below the maximum social benefit, that market failures. Governments in order to address this market failure, the main use of the government-funded mainly direct benefits and indirect tax incentives-based incentives to encourage enterprises to carry out technological innovation. Government funding is an advance, short-term incentives, and transparency in government subsidized low, fair poor; use of tax incentives and market forces, with fairness and universality, once the business research and innovation activities, you can get the appropriate tax incentives, tax benefits and therefore more widely adopted by governments. Our tax incentives for R&D spending focused on income tax benefits, due to the current system environment is not perfect, enterprise income tax preferential policies on research and innovation is mainly performed by local governments, enterprises based on self-interest maximization objectives under, there is motivation by the relevant local government officials, such as access to unproductive rent-seeking bribes. Due to differences in the institutional environment of the provinces at present, the company’s rent-seeking space and there are also differences in costs based on cost-benefit analysis, environmental impact of the difference in rent-seeking and rent-seeking space extent of corporate income tax. Based on the basis of previous studies of the effectiveness of tax incentives for R&D spending, the main study of small plates listed companies in the institutional environment differentiated income tax incentive effect on R&D expenditures. This paper selected small plates listed companies from2008to2013a total of216enterprises in the sample, corruption in the provinces through standardization after filing malpractice representation system of environmental differences in the area under study differentiated income tax system environment impact on R&D spending. The empirical results show that the difference by the institutional environment does affect the degree of corporate income tax which affects the level of corporate R&D expenditures, by rent-seeking enterprise income tax incentives for R&D spending has acquired a negative impact. Finally, this paper points out the shortcomings of the current income tax preferential policies, and made recommendations to improve incentives for R&D spending.