Effect Of R&D Super Deduction Rate On Enterprises' R&D Expenses

At present,the economic situation at home and abroad is complicated and serious.The economic development of our country is confronted with many challenges and the economic growth is slowing.Since the 18th National Congress of the CPC,the Chinese government has introduced a series of tax preferential policies that encourage enterprises to participate in innovative activities and strengthen the core competitiveness.The pre-tax super deduction of research and development(R&D)expense,as a strong incentive policy for enterprise innovation,is subject to social and academic attention in recent years.Based on Market Failure Theory and Tax Incentive Theory,this paper employs the small and medium-sized enterprises(SMEs)listed on the New Third Board as samples,combined with quantitative method of propensity score matching(PSM),to study the impact of increasing the deduction ratio of R&D expenses from 50%to 75%on R&D investment of SMEs.The sub-sample analysis is conducted based on the differences in the ownership of the enterprise and the degree of marketization in the region to deeply analyze the policy effects.The study shows that after enjoying a higher percentage of R&D expense deduction,the R&D expense of technology-based SMEs has increased significantly.This indicates that the increase in the ratio of deduction is conducive to the increase in R&D investment.The results of the sub-sample analysis show that private enterprises respond more actively to the increase of deduction ratio;favorable market conditions also contribute to policy efforts.In addition,this paper also uses the data of the SMEs listed on the New Third Board from 2015 to 2017 and method of difference-in-difference(DID),to compare the difference in R&D intensity before and after the increase in the deduction ratio.The result verifies the promotion effect of the increase in the deduction ratio on enterprises'R&D inputs.Finally,according to the conclusions of the study,suggestions are given.For instance,give preferential tax incentives to SMEs and diversify the preferential methods of R&D.The innovation of this paper is mainly reflected in the following two aspects:First,limited researches focus on the impact of the super deduction of R&D expenses among the existing literature,and the policies that these researches based on are relatively old.This paper studies the preferential policy of 2017 that deduction ratio increased to 75%(CS(2017)No.34),therefore with high pertinence and timeliness.Second,most of the existing studies are based on questionnaires and case analysis,and empirical research is relatively lacking.This paper uses the data of SMEs of the New Third Board combined with the PSM,which improves the estimation efficiency and can more accurately evaluate the policy effects.On this basis,this paper distinguishes different ownerships and market environments,further analyzes the different effects of the policy on heterogeneous subjects,and expands the research in this field.