Research On The Impact Of Tax Incentives On Technology-based SMEs’ R&D Investment

As an important means for government to support enterprise innovation,tax incentive is an important incentive mechanism to solve the problem of the lack of innovation motivation caused by the externality of innovation.Technology-based SMEs are important subjects of "mass entrepreneurship and innovation",but due to the lack of resources and anti-risk ability,it is more urgent for the government to support innovation activities.Therefore,it is significant to explore the effect,mechanism and factors of tax incentives on innovation of technology-based SMEs.Based on multiple theories such as political championship theory,this paper analyzes the effect and mechanism of tax incentives on R&D investment of technology-based SMEs.And from the perspective of local government governance and corporate governance,explore the impact of these two factors on the effect of tax preferential policies.Specifically,focus on local government governance and select three variables: local financial pressure,government reverse rent-seeking and government transparency,and select three variables: equity concentration,independent director size and senior executives’ political affiliation around corporate governance to test the regulatory effect of these factors on the relationship between host variables.This paper selects the technology-based SMEs listed on the New Third Board of China as the sample to validate the assumptions.It turns out that the tax incentives is positively related to the R&D investment of technology-based SMEs firstly.The tax incentive can stimulate the R&D investment through three mechanisms: risk reduction,resource acquisition and signal transmission,in which small and medium-sized enterprises are more dependent on the two mechanisms of resource acquisition and signal transmission.Secondly,from the perspective of the regulatory effect of local government governance,local financial pressure and government reverse rent-seeking will weaken the policy effect of tax preference,while government transparency can improve the policy effect of tax preference.Finally,from the perspective of the regulatory effect of corporate governance,equity concentration and political affiliation of executives will weaken the policy effect of tax incentives,while the size of independent directors can improve the policy effect of tax incentives.These are the innovations of this article: Firstly,from the view of "government-enterprise",the main body at both ends of the preferential tax incentive policies,the influence factors of the effect of the preferential tax policies are comprehensively discussed around local government governance and corporate governance.Secondly,the moderating effect of local government governance on the relationship between tax incentives and R&D input of SMEs is examined in multiple dimensions,and relevant studies on the effects of tax incentives are enriched and deepened from the perspective of local government governance,providing explanations for the inconsistencies in the conclusions of existing studies on the effects of tax incentives.Finally,taking technology-based SMEs as samples,this paper reveals the mechanism of tax incentives on R&D input of SMEs,and explores the different degrees of dependence of SMEs on various mechanisms.