The Impact Of Government Subsidies And Tax Incentives On SME Financing

SMEs are the mainstay of the market economy.They have played the role of explorer and pioneer in optimizing investment dynamism,technological R&D progress,and industrial structure upgrading.They have an irreplaceable important position in the national economy.SMEs have played the role of explorer and pioneer in optimizing investment dynamism,technological R&D progress,and industrial structure upgrading.As China's economy enters the stage of high-quality development,the issue of financing development of SMEs is more worthy of attention.In the past,the research has analyzed the problem from the breadth of fiscal policies,but there are few empirical studies.In this context,this paper focuses on the impact of government subsidies and tax incentives on SME financing in the 2013-2016 non-financial business.The main contents of this paper are as follows: This paper studies the impact of government subsidies and tax incentives on SME financing.The first three chapters are the theoretical part of this paper.The first chapter is an introduction to the whole article,which reviews the previous research.The second chapter expounds the government subsidies and tax preferential policies that support China's SME financing,and analyzes the theoretical basis of fiscal and tax support.The third chapter mainly analyzes the impact mechanism of government subsidies and tax incentives on SME financing and the main problems of China's current fiscal and taxation regulation.The fourth chapter is the empirical part of the article.After screening,we get 2608 valid samples and analyze the impact of government subsidies and tax incentives on SME financing from three aspects: SME debt financing ratio,debt financing structure and debt capital cost.Through research hypotheses,variable definitions,and model construction,we obtained empiricalresults using OLS regression and fixed-effects model.We conducted robustness tests and endogeneity tests also.In the fifth chapter,we draw on the typical policies of government subsidies and tax incentives in France and Germany,so as to consider the current fiscal and taxation support for SME financing reform programs,and make appropriate proposal.The empirical results of this paper are as follows: 1.Tax incentives can help improve the debt financing difficulties of SMEs.The increase in government subsidies will lead to a decline in the proportion of debt financing,and tax incentives will help increase the proportion of debt financing.2.Government subsidies can help improve the debt financing structure of SMEs.The increase of government subsidies will help increase the long-term debt financing of enterprises.The impact of tax incentives on the debt financing structure is uncertain.3.The government subsidy is negatively correlated with the cost of debt funds,but the impact is not significant.The tax incentives bring about an increase in the cost of debt funds,and the impact is not significant.The main conclusions of this paper are as follows: 1.Tax preferential policies can help the proportion of debt financing rise,that is,the implementation of tax incentives can alleviate the financing difficulties of enterprises.The government subsidy does not promote the increase of debt financing of enterprises.Thus,in solving the problem of debt financing difficulties for SMEs,the government should focus on developing indirect support methods.2.The government subsidy policy is more conducive to optimizing the debt financing structure of SMEs,guiding the financing choices of SMEs from short-term financing to long-term financing.The impact of tax incentives on the financing structure is uncertain.The government should rationally use the government subsidy policy and establish a good Political and business relations.3.The increase of government subsidies will help the cost of SME debts to fall.The tax incentives cannot reduce the cost of debt funds.On the issue of improving the cost of financing funds,the government subsidy policy has a good effect,but the impact is not obvious.The government should strengthen its focus on the high debt financing costs of enterprises,support SMEs to reduce financing costs.