Research On The Innovation Efficiency Of Chinese Industrial Enterprises Driven By Financial And Tax Policies

Financial subsidies and tax incentives are important tools of government macro-control,which are important to solve the problem of market failure and even to ensure the smooth operation of the economy.With the full implementation of China’s innovation-driven development strategy and the clarification that enterprises are the main body of developing socialist market economy,the development of enterprise innovation is related to the national innovation status.However,the high costs and risks associated with independent research and development by enterprises can lead to negative externalities that transcend individual boundaries and affect the development of the entire market economy.Financial subsidies and tax incentives,as important external factors for corporate innovation,can support corporate R&D investment and product technology innovation.Therefore,there is an urgent need for financial subsidies and tax incentives to guide and support Chinese enterprises on the road to innovation.This paper explored the relationship between fiscal policy and innovation efficiency of Chinese industrial enterprises,and offer theoretical and practical guidance about the study of fiscal policy-driven innovation efficiency improvement of Chinese industrial enterprises.Based on relevant studies by domestic and foreign scholars,this paper establishes a framework for analyzing the dynamics and transmission mechanisms of financial subsidies and tax incentives that drive the innovation efficiency of Chinese industrial enterprises,combing through the relevant financial subsidies and tax incentives in China since the reform and opening up,and analyzing the problems of them.This paper empirically investigates the driving effects of financial subsidies and tax incentives on the innovation efficiency of Chinese industrial enterprises from 2005 to 2019 using a panel regression model,and analyzes spatial heterogeneity through sub-sample regression,mediating effects through "three-step" regression,and non-linear effects through threshold regression.There are four main findings of the study.First,the effect of fiscal and tax policies on enterprise innovation suffers from some problems such as low intensity of R&D investment,tax incentives light on "ex-ante",and poor policy targeting.Second,fiscal subsidies and tax incentives as a whole have an incentive effect on the innovation efficiency of Chinese industrial enterprises,but they show a non-linear characteristic of diminishing margins.Third,enterprise R&D investment is an important channel through which fiscal and tax policies drive the improvement of innovation benefits of Chinese industrial enterprises,and there is a mediating effect between fiscal and tax policies and innovation benefits of Chinese industrial enterprises.Fourth,fiscal subsidies and tax incentives show heterogeneous characteristics and nonlinear features in space,and there are differences in the driving effects on eastern,central and western regions.To sum up the above,this paper puts forward policy suggestions from the following three aspects.First,improve the financial and taxation system to enhance the competitive advantage.Secondly,to build an innovation platform and promote cooperation between enterprises and institutions.Third,cultivate innovative talents and optimize the incentive mechanism.