Research On The Incentive Effect Of R&D Expenses Plus Deductions On R&D Investment In The Pharmaceutical Industry

With the implementation of the 19 th CPC National Congress' s "healthy China" strategy and the accelerated process of "13th Five-year" deepening the reform of medical and health system,the rapid development of new medical technology,China's pharmaceutical enterprises are trying to transform from "generic drug strategy" to "innovative drug strategy".The R&D investment and intensity of the pharmaceutical industry are increasing,but compared with the investment of pharmaceutical enterprises in developed countries there is still a big gap.In the increasingly competitive international context,in order to achieve sustained growth in the pharmaceutical industry and optimization and upgrading of industrial structure,it is necessary to continuously improve its technological innovation capabilities for R&D activities.Pharmaceutical R&D has the characteristics of high risk,high technology,high added value and long cycle,relying entirely on market mechanism is easy to produce the problem of insufficient R&D investment,and needs to stimulate the R&D activities of the pharmaceutical industry with the help of government diversified fiscal policies.The enterprise R&D expenses plus deduction policy is an important part of the government's series of tax incentives for enterprises to increase R&D investment.With the passage of time,this policy has been constantly advancing with the times and increasingly improving,but whether it really achieves the effect of encouraging pharmaceutical companies to increase R&D investment,what obstacles exist in the process of specific tax practice,and what perfect areas have for policies,these issues are highly concerned by the government,enterprises and other parties.In this context,this paper deeply analyzes the actual incentive effect of R&D expenses plus deduction tax preferential policies on the pharmaceutical industry.Through reading and combing the relevant literature at home and abroad,it is found that foreign scholars have carried out a lot of empirical research on the effectiveness of R&D tax preferential policies.Most of the research results show that R&D tax preferential policies have played a positive role in R&D investment of enterprises.In China,more attention is paid to the qualitative analysis of the policy effect of R&D expenses plus deduction.In terms of empirical research,little attention has been paid to the pharmaceutical industry.Firstly,this paper introduces the relevant theories that need to be used in this research,including endogenous economic growth theory and market failure theory.It also analyses the influence mechanism of R&D expenses plus deduction policy on R&D activities of enterprises from three perspectives: reducing R&D costs,increasing R&D activities and reducing R&D risks.Secondly,it analyzes the current situation of China's pharmaceutical industry R&D investment and R&D expenses plus deduction policy.From the macro-national R&D investment and micro-pharmaceutical enterprise R&D investment two angles,we use the chart data trend analysis method from the scale of R&D expenditure,R&D intensity,expenditure subject,enterprise performance and other dimensions to discuss.It has been found that in the past decade,China's R&D investment has been on the rise in both macro and micro perspectives,and has gradually entered the medium-sized R&D countries,but there is still a certain gap with the typical R&D countries.At the same time,the evolution of China's R&D expenses plus deduction policy is combed and summarized as follows: firstly,the subject of policy enjoyment is expanding;secondly,the R&D costs collection is becoming more and more refined;thirdly,financial accounting requirements and reporting systems need to be simplified;fourthly,preferential efforts are constantly improving.The empirical part takes 860 sets of sample data of 172 listed companies in Shanghai and Shenzhen A-share pharmaceutical industry from 2013 to 2017 as observations,and uses the fixed-effects model to analyze the incentive effect of R&D expenses plus deduction policy on pharmaceutical industry R&D investment.The empirical results show that the R&D expenses plus deduction policy has significantly stimulated the R&D investment in the pharmaceutical industry.Meanwhile,the scale of enterprises,the intensity of government subsidies,the nature of enterprises,and the profitability have positive incentive effects on R&D investment,while the capital structure has a reverse impact.Subsequently,in order to provide reference for China to further optimize R&D expenses and deduction policies,this article introduces some tax preferential policies for the R&D activities of some typical R&D countries and these of Israel and South Korea with high R&D intensity.Finally,through the previous theoretical analysis-the present situation introduction-empirical results-the path of international reference,we put forward the following suggestions: first,adhere to the “inclusiveness” and explore the “speciality”;second,give more preferential treatment to SMEs and private enterprises;third,strengthen the cooperation of government departments and improve relevant management mechanisms;fourth,enterprises should improve financial accounting and project management,and strengthen departmental collaboration.