Adjustment Costs, Tax Incentives And Investment In Technological Innovation

As the first driving force for sustainable economic development,technological innovation investment is an important strategic choice in establishing an innovation-oriented country.Meanwhile,enterprises play an increasingly important role in this process.That's the reason why China has introduced a series of policies to promote technological innovation investment,which include tax incentives,one of the most important measures in stimulating technological innovation investment.Therefore,the effect of tax incentives on technological innovation investment has becoming the focus of theoretical research,the results of which can improve the efficiency of tax incentives,optimize the allocation of technological innovation investment resource and improve the level of technological innovation investment.On the one hand,based on the Cobb-Douglas production function,we treated technological innovation investment as intellectual capital and introduced it into the function,then built the theoretical models including cost adjustment,tax incentives and technological innovation investment,besides,combined with investment theory,technological innovation theory and economic growth theory,the influence of adjustment cost on enterprise technological innovation investment has been analyzed in the article.Besides,we also analyzed the relationship between tax incentives and investment in enterprise technological innovation investment from the perspective of adjusting cost.The research provides a theoretical basis for more comprehensive investigation of the effect of tax incentives on technological innovation investment.This paper conducts empirical study based on the data of 2012-2016 all Shanghai and Shenzhen A-share listed companies.Through the establishment of the quadratic multivariate regression model,we carried on the empirical analysis and the robustness test.Empirical results show that,the relationship between adjustment costs and technological innovation investment is an inverted U-shaped relationship.That is to say,there exist a turning point,when the level of adjustment costs is lower that it,the relationship between adjustment costs and R&D investment is positive,when the level of adjustment costs is higher that it,the relationship between adjustment costs and R&D investment is negative.The impact of tax incentives on technological innovation investment depends on the level of adjustment costs.When the level of adjustment cost is low,tax incentives can inspire technological innovation investment,and when the cost of adjustment is too high,It counteracts the promotion effect of tax incentives on technological innovation investment and causes the incentive effect to disappear.After the introduction of property rights,compared with the state-owned enterprises,non-state-owned enterprises technological innovation investment can bear lower adjustment costs turning point and when the cost of adjustment is too high,adjustment costs hinder the tax incentive effect more significantly.Based on the research conclusion,this paper provides relative suggestions to enhance tax incentives from the aspects of reduction of enterprises adjustment costs.In this paper,we not only break through research framework of the existing literature which study technological innovation investment from the aspects of enterprise scale,market environment,and enterprise age and so on but also analyzes the dynamic relationship between the adjustment cost and technological innovation investment dialectically.Besides,we also reveals mechanism of action the adjustment costs influence the relationship between tax incentives and technological innovation investment and the reasons why the conclusions of the existing research on the relationship between the adjustment cost and technological innovation investment are different.Furthermore,the paper provides a new theoretical basis for the government to optimize R&D investment resources.