Tax Incentives, Financing Constraints And Enterprise Performance

With the deepening of global economy and the continuous development and changes of Chinese market economy,the competition between countries and enterprises is also gradually strengthening.In order to enhance the competitive advantage of Chinaese economic strength,a series of relevant policies have been launched to stimulate the relevant activities of the government and enterprises.As the core role of our economic market,small and medium-sized enterprises have made great contributions to stabilizing social employment,optimizing resource allocation and promoting social and economic development.But numerous private enterprises are facing serious financing difficulties although their development momentum is powerful.The information asymmetry in the market causes enterprises to face different degrees of financing constraints,which has a certain impact on the development of enterprises.As the cradle of financing for small and medium-sized enterprises,GEM provides more diversified financing methods and channels to help them develop.In order to improve their performance,enterprises need to clarify their own situation,and make reasonable use of various policies issued and implemented by the government,especially effective corporate tax preferential policies,so as to promote enterprises to make more profits and achieve sustainable development.Therefore,how to reasonably use tax policies to alleviate the financing constraints of enterprises and promote the improvement of enterprise performance is worth further study.This paper firstly starts from the background and significance of related research on enterprise performance,analyzes and summarizes the current research status of tax incentives,financing constraints and enterprise performance by domestic and foreign scholars.Secondly,tax incentives,financing constraints and corporate performance and other core concepts are defined.Then expound the relevant theoretical basis,including market failure theory,capital structure theory and optimal sequence financing theory.And analyze the mechanism of tax incentives,financing constraints and enterprise performance and put forward the corresponding hypothesis.Combined with empirical research method,this paper selects companies listed on GEM in China from 2010 to2021 as the research samples.A comprehensive index system of enterprise performance comprehensive is established and the regression model is constructed to verify the hypothesis.Explore the impact of tax incentives on firm performance and the moderating effect of financing constraints on the relationship between tax incentives and firm performance.Through mechanism analysis,descriptive statistics,multiple regression,heterogeneity test and robustness test,the reliability of the empirical conclusion is verified.The following relevant results are obtained: From mechanism analysis,it could be found that tax incentives generate incentive effect for enterprise in short term and long term.It can promote enterprise’s profitability in the short term,and improve enterprise’s management ability and shareholder profitability as well as the ability of sustainable development in the long term.But corporate financing constraints faced produce an inhibitory effect on some aspects,such as investment in enterprise development.To some extent,the positive effect of tax incentives on enterprise performance is weakened.The combination of the two can improve the business level of enterprises as a whole and still effectively promote the improvement of enterprise performance.From the empirical results,it shows that tax incentives have a significant positive promoting effect on enterprise performance of GEM listed companies,while financing constraints have a significant negative regulating effect on the two,which inhibit the impact of tax incentives on enterprise performance.From the heterogeneity analysis,it found that the manufacturing enterprise of tax incentive effect is more outstanding than the non manufacturing enterprises,and the manufacturing enterprises are faced with the financing constraints of negative regulation are more significant.The promoting effect of tax incentives and the negative moderating effect of financing constraint are more outstanding for private enterprises.And the impact of tax incentives on enterprises in the western region is greater,while the moderating effect of financing constraints of enterprises in the eastern region is more significant,because of more abundant and diversified financing directionFinally,according to the results of the empirical research,corresponding countermeasures and suggestions are put forward for governments and enterprises.The government should improve the tax incentive system,promote industrial upgrading,and strengthen the tax supervision system.Enrich preferential forms,adapt measures to local conditions,strive for the maximization of the incentice utility.In the meanwhile,to meet the appropriate financing needs of enterprises,the government could promulgate corresponding policies to alleviate financing difficulties,provide and improve the corresponding standard system of enterprise information disclosure,and carry out supervision and management to ensure the standardized operation of the system.Enterprises should actively respond to the preferential tax policies given by the government and make reasonable use of them to enhance their competitiveness.Strengthen the financing ability of enterprises,reduce the inhibitory effect of financing constraints on enterprise performance.Establish strict credit guarantee and information disclosure system to reduce financing constraints.