Tax Incentives,R&D Investment And Corporatecash Holdings

Cash is the "blood" of an enterprise,running through the whole process of production management.Cash holding policy is one of the important financial management decisions of enterprises.The cash holding behavior of enterprises can not only reflect the financial and management strategies of enterprises,but also relate to the macroeconomic environment and financial status of enterprises.Research on reasonable cash holding level can ensure the stable development of enterprises.In the report of the 19 th National Congress of the Communist Party of China,the party proposed to unswervingly implement the strategy of science and technology innovation driven development.Innovation is the original power of economic prosperity and development,and one of the important factors affecting economic growth.Carrying out technology innovation is conducive to enhancing the core competitiveness of enterprises in the market and promoting the stable development of enterprises.Enterprise investment in innovation projects is directly related to R & D investment.Therefore,discussion on R & D investment and cash holding not only responds to the call of national policies,but also conforms to the requirements of economic development.In order to speed up the innovation and development of enterprises and encourage and support the continuous innovation of enterprises,it is not only necessary to increase the self innovation ability of enterprises and the investment of research and development costs,but also necessary for the government to formulate appropriate and reasonable effective policies.In the policies formulated by the government,the government can reduce the cost and risk of R & D activities by implementing preferential tax policies,enhance the innovation intention of enterprises,and indirectly support enterprises to carry out innovation activities.Firstly,this paper expounds the concept of cash holding,R & D investment and R & D expenses plus deduction,combing and studying the domestic and foreign research literature on cash holding,and finds that the current literature on cash holding factors in China mainly studies the internal characteristics and external environment of the company.In the external environment,the national tax policy is less concerned.It provides a new perspective and direction for our research to study cash holding through the policy of R & D expenses plus deduction.Under the environment of R & D tax policy,this paper discusses the relationship between cash holding and R & D investment,considers the impact of R & D tax policy implementation on cash holding and R & D investment,and puts forward the hypothesis for the research.Then,the empirical analysis is carried out and the results are analyzed.Finally,the conclusion is drawn and the corresponding policy suggestions are put forward according to the research results.In terms of research design,this paper studies the relationship between R & D investment and cash holding through a quasi-natural experiment.First,it provides a new research direction and method for the exploration of cash holding;second,in the external environment created by the policy of R & D expenses plus deduction,it can further explore the relationship between R & D investment and cash holding,study the changes of R & D investment over time and national policies,and give some research suggestions for how enterprises should hold cash and the country to formulate relevant policies To make certain contribution to the improvement of China's economic development.This paper selects the data of China's A-share listed companies from 2007 to 2018.Firstly,the cash holding level of enterprises lags behind for one period,and the relationship between R & D investment and cash holding in the next period is studied;secondly,based on the external institutional environment of R & D tax incentive,the relationship between R & D investment and cash holding in the next period is tested from the perspective of financing constraints;finally,in order to accurately study the impact of policies on cash holding,two experiments are set up to verify: One is to test the relationship between tax incentive policy and cash holding in enterprises with R & D investment and enterprises without R & D investment by two virtual variables multiplication;the other is to divide the experimental group and the control group according to the actual tax rate and legal tax rate under the condition of policy change in 2015 for quasi natural experimental research.The results show that: the increase of R & D investment in this period will improve the cash holding level of enterprises in the next period;the nature,scale and whether to pay dividends are used to measure the degree of financing constraints of enterprises,and it is found that there is a positive relationship between R & D investment and future cash holding,and enterprises will hold more cash.The R & D plus deduction policy is applicable to non-state-owned enterprises,small-scale enterprises and non-state-owned enterprises The enterprises paying cash dividends have a greater impact;the implementation of R & D expenses plus deduction policy can effectively alleviate the difficulties brought by financing constraints and reduce the demand of R & D investment for future cash holdings.In addition,we conducted an extensive study in this paper,and found that the listed companies on the main board are more vulnerable to the impact of the R & D plus Deduction Policy,indicating that enterprises with higher accounting quality will actively participate in the R & D plus deduction policy activities.This study confirmed that the implementation of R & D expenses plus deduction policy can effectively help enterprises reduce the management cost and opportunity cost of cash holding,and found that the effect of R & D expenses plus Deduction Policy in small-scale enterprises is not significant,so we should strengthen the tax incentives for small and medium-sized enterprises.