| SMEs are important economic entities in the Chinese market.It is necessary to mobilize the innovation potential of SMEs and enhance their economic vitality.However,due to factors such as externalities,publicity and uncertainty of innovation,the enthusiasm of innovation is severely weakened.In order to encourage enterprise to innovate,the government has given corporate tax incentives and policy support in recent years.A number of studies have conducted research on the implementation effects of tax incentives,and found that the implementation of tax incentives at the enterprise level is affected by many factors.Current studies identify some factors influencing the validity of tax incentives,such as industry environment,institutional environment,social development status and other external factors,as well as internal factors such as firm size,property rights,and executive background.Institutional shareholding are also important factors affecting corporate innovation.Active institutional holdings could improve the information asymmetry of listed companies and reduce agency costs,thereby promoting technological innovation.However,researches also prove that short-sighted or speculative institutions will mislead the corporate development strategy and reduce the enthusiasm of enterprise on innovation.Therefore,this paper examines the impact of institutional holdings on innovation in SMEs and its regulatory role combining with the background of the Chinese market while studying the correlation between tax incentives and technological innovation of small and medium-sized enterprises.Because of the diversification trend of Chinese institutional investors,we focus on the heterogeneity analysis of institutional holdings.In addition,SMEs generally face financing difficulties in the development process.On one hand,financing constraints will hinder capital flow,reduce resource allocation efficiency,and lead to insufficient investment in innovation;on the other hand,some studies show that under the pressure of financial constraints,managers could be more active in improving operational efficiency and performance.Therefore,the role of financing constraints is included in the study.The tax incentives and the impact of institutional holdings on corporate innovation under the constraints of financing are investigated to enrich the research results of SME innovation.Using status of small and medium-sized listed companies,this paper firstly studies the correlation between tax incentives and enterprise innovation,selecting not only R&D investment to measure innovation,but also patent outputs divided into two categories of invention patents and low-quality patents,trying to test whether tax incentives can encourage enterprises to effectively improve the level of innovation.Secondly,to discuss the heterogeneity of institutional ownerships,we study the relationship between fund,qualified foreign institutional investors(QFII),brokerages and insurance institutional investors and technological innovation,and then test the impact of heterogeneous institutional shareholding on the implementation of tax incentives.Finally this paper explores the practical impact of tax incentives and institutional holdings on SME innovation activities under financing constraints.Research results show that tax incentives can promote SMEs to increase R&D investment and increase invention patents;institutional shareholding has a heterogeneous impact on the implementation of SME innovation and tax incentives: the role of fund holdings in the R&D investment phase on tax incentives It has a positive adjustment effect and has no significant impact at the patent output stage;Qualified Foreign Institutional Investor Shareholding(QFII)is an incentive effect that significantly enhances tax incentives at the patent output stage,and increases the quantity and quality of patent output;Brokerage and insurance holdings significant regulatory effects.The incentive effect of tax incentives and the adjustment effect of institutional shareholdings have changed significantly in the condition of financial constraints:(1)Tax incentives have a more positive effect on R&D investment in high financing constraints enterprises.(2)Funds and Qualified Foreign Institutional Shareholding(QFII)play a more active role in the case of low financing constraints,and promote the innovation investment level and patent quality of SMEs.However,in the condition of high financing constraints,fund holdings are not conducive to the improvement of corporate innovation efficiency.Qualified foreign institutional investors(QFII)are more inclined to low-quality innovation.(3)Brokerage holdings have no significant impact in the case of low financing constraints.In contrast,in the conditions of high financing constraints,they inspire innovation and improve the quality of patents.(4)Insurance holdings have no regulating effect considering financial constraints. |
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