The Incentive Effect Of The Tax Policy On Accelerating The Depreciation Of Fixed Assets On Enterprise Innovation

Science and technology innovation has been the focus.Enterprises are the subject of science and technology innovation,and the technological innovation capability of enterprises is a key measure to achieve high-quality sustainable development,strengthen the international competitiveness and enhance comprehensive national power.However,enterprises’ investment and R&D is restricted by the increasingly fierce market competition,continuously rising operating costs and difficulties in enterprise financing.The effect cannot be ignored although the impact of policy is indirect.Laws and regulations of accelerated depreciation have been adjusted several times from 2014 to2019 to fully include all manufacturing enterprises for incenting fixed asset updating and innovation.The implementation of accelerated depreciation policy can reduce the amount of tax paid by enterprises at the initial stage of investment,reduce their tax burden,and improve their willingness to innovate and the efficiency of capital use.In the context,this work explores the incentive effect of accelerated depreciation policy on enterprise innovation,and provides theoretical and empirical evidence for the subsequent deepening of the policy from the perspective of the accelerated depreciation policy.In theoretical analysis section,this paper analyzes the inherent mechanism to promote enterprise innovation based on depreciation compensation theory,market failure theory and endogenous growth theory: government intervention and regulation are essential since the externalities of innovation activities and their public goods properties lead to market failure,and accelerated depreciation policy of fixed assets,as an important tax incentive in corporate income tax,is one of the powerful means for the government to correct market failure.Then,this paper illustrates the mechanism and clarifies that the policy effects are mainly reflected in raising the level of enterprise innovation investment,correcting the externality of innovation activities and accelerating enterprise capital turnover.Finally,the basic research hypothesis and policy implementation path are proposed: the accelerated depreciation policy has a significant positive incentive effect on enterprise innovation by increasing investment in fixed assets and increasing the proportion of R&D personnel.In empirical analysis section,companies in Shanghai and Shenzhen A-shares from2012-2021 are selects as the research sample.Establishing a multi-temporal double difference model to quantitatively study the policy incentive effect based on three policy shocks in 2014,2015 and 2019.Most studies focus on the accelerated depreciation policy have studied the innovation incentive effect considering innovation input and innovation output.However,a new parameter-innovation efficiency,which is more representative of the core competitiveness of enterprises,is added in this paper.First,this paper conducts a basic regression between accelerated depreciation policy and innovation level of enterprises,and selects R&D investment intensity and innovation efficiency as the explanatory variables,which reflect the core competitiveness of enterprises.Innovation output is subsequently selected as a replacement indicator to measure the degree of innovation in order to more comprehensively understanding the policy effects of accelerated depreciation policy on fixed assets.Second,the robustness of the empirical results is improved by varying the time of policy occurrence and placebo tests of randomly selected experimental groups on the basis of the derived baseline regression results.Then,fixed asset investment and R&D personnel input are utilized as mediating variables to test the impact mechanism of innovation output to explore the path of accelerated depreciation policy of fixed assets on firm innovation.Finally,enterprises are classified in terms of their property rights,enterprise size and financing constraint level,regional marketization degree,regional fiscal policy and rule of law environment to enhance the precision of the findings.The classification considers the heterogeneous factors of enterprises and the heterogeneous factors of macroenvironment can differ on the incentive effect of accelerated depreciation policy.The results indicate that accelerated depreciation policy on fixed assets has a significant effect on improving firms’ innovation inputs,innovation outputs and innovation efficiency.The incentive effect of accelerated depreciation policy on innovation varies with the differences of firms and external conditions of the macro environment.Specifically,state-owned enterprises,small-scale enterprises,and enterprises with high financing constraints can be affected more significant by the policy.Increasing the higher degree of local marketization,increasing fiscal expenditures in the region,and strengthening enforcement are conducive to the incentive effect of accelerated depreciation policy on enterprise innovation.This paper puts forward the following policy recommendations in terms of the problems that still exist in accelerated depreciation: first,deepening the reform of accelerated depreciation policy,expanding the scope of application of the policy and increase the one-time deduction percentage for asset expenses;Second,refining the preferential policy for accelerated depreciation need to be considered.Highlighting the policy differences for enterprises of different nature and different conditions,further increasing the compliance rate;Third,the problem of crossover of various tax incentives and the effect of offsetting should be avoided;Four,Strengthening the protection for intellectual property rights,safeguarding the innovation of enterprises,and establishing a better and more complete legal environment,can providing a better innovation environment for enterprises.