Innovation-oriented Tax Deduction Adjustment And Corporate Innovation

The R&D expense add-on deduction has long received attention from all walks of life due to its wide impact and strong preferences.In the existing studies,scholars have focused on analyzing the amount of R&D expense add-on deduction and the impact of Cai Shui [2015] No.119 on enterprises’ innovation activities.But the percentage of add-on deduction was increased from 50% to 75% in 2018.In this regard,it is inevitable to question whether such a substantial adjustment can produce a positive policy effect.If a positive effect does exist,does the effect of the policy differ for different types of enterprises? Based on this,this paper adopts the PSM-DID model to track and analyze the impact of the adjustment of the R&D expense deduction policy on the innovation activities of enterprises in 2018,taking the A-share listed companies in Shanghai and Shenzhen from 2016 to 2020 as the research objects.This paper sorts out the mechanism of the effect of the R&D expense-plus deduction policy on enterprises’ innovation activities and the reasons for the differences in policy effects due to enterprise heterogeneity,and accordingly proposes the research hypothesis of this paper,followed by a quantitative analysis using the obtained data.First,the three effects of Cai Shui [2018] No.99 on the innovation input,output and efficiency of enterprises continuously enjoying the concession are explored.And the annual effect of the policy adjustment is further analyzed.Second,the differences in policy effects due to differences in firm ownership and firm size are specifically investigated.Then,we analyze whether the policy adjustment affects the innovation efficiency of enterprises through innovation input,abnormal innovation input and normal innovation input.Finally,the paper focuses on the "attraction" effect of this policy.The empirical findings are as follows.First,the policy adjustment has a positive effect on the innovation activities of firms that continue to enjoy the benefits.After considering the annual effect,it is found that the policy has a sustainable effect on the innovation activities of enterprises.Second,compared with SOEs,non-SOEs are stimulated by the policy to a greater extent to increase innovation inputs,improve innovation outputs,and improve innovation efficiency.For different sizes of firms,the policy has a better effect on stimulating innovation activities of firms,and the regression results of innovation output and efficiency of large-scale firms are even negatively significant.Third,the policy adjustment needs to affect the innovation efficiency of enterprises through innovation inputs,and further analysis reveals that only normal innovation inputs play a mediating role and abnormal innovation inputs do not play a role.Fourth,the policy effect is not optimistic for the enterprises that enjoy the R&D expense deduction for the first time,and the policy only brings an increase in innovation input.There are negative effects on the other two aspects.Based on the above analysis,this paper suggests that the policy should be long-term,targeted and progressive in the process of R&D expense deduction.It is also necessary to pay attention to the improvement of enterprise capital management level and regional innovation environment.The innovation of this paper is demonstrated by examining the impact of the policy adjustment of Cai Shui [2018] No.99 document on firms’ innovation activities.The paper then focuses on the impact of the policy adjustment on firms’ innovation inputs while also noting the mediating role it possesses.And it also further distinguishes between normal innovation input and abnormal innovation input in innovation input,and examines the respective mediating role of each of them.