Research On Operational Decision And Financing Strategy Of Manufacturer’s Product Innovation Under The Influence Of Tax

R&D(Research and Development)and innovation are the key to driving the endogenous growth of enterprises.The investment of sufficient R&D expenses is the cornerstone for enterprises to cultivate innovation ability.However,the lack of capital is a common problem faced by SMEs in product innovation.With the development of fintech,bank credict continues to help solve the problem of enterprise capital constraints.In 2020,the Beijing Stock Exchange for "SRDI"(" Specialized,Refinement,Differential,Innovation " enterprises was established,which provided a new financing way for the vigorously R&D of "SRDI" enterprises.In addition,in order to encourage enterprise innovation,the state has put forward a large number of tax and fee reduction policies to increase the cash flow of enterprises and alleviate the difficulties of enterprise development.In this social background of encouraging innovation and entrepreneurship,will the enterprise with capital constraints choose product innovation? If choosing product innovation,which financing mode would the enterprise prefer between bank lending and equity financing? In addition,what role will financing factors such as bank loan rate,enterprise valuation level coefficient,and different taxes and related incentives play?For this purpose,under the two financing modes of bank lending and equity financing,this paper studies the operating decision and financing strategy of manufacturer’s product innovation by considering three situations respectively: no tax impact(NT),only considering the impact of corporate income tax(CT),and considering the impact of corporate income tax and value-added tax(C&VT).First,this paper builds a manufacturer’s product innovation model to obtain the optimal decision of supply chain,and discusses whether the manufacturer will choose product innovation based on the criterion of whether product innovation can bring value added.Secondly,if he chooses product innovation,this paper further analyzes the influences of financing related factors such as bank loan interest rate,enterprise valuation level coefficient,and tax-related factors such as the additional deduction ratio of enterprise income tax and research and development expenses,VAT and VAT immediately levied and refunded ratio on product innovation.Finally,this paper studies the choice of manufacturer financing mode: bank lending or equity financing.The results are as follows: 1)Choice of product innovation or not: Under different financing modes,the manufacturer has different choices of product innovation or not.Under the bank lending mode,whether the manufacturer’s product innovation depends on the consumer’s sensitivity coefficient to product innovation and the influence of tax.However,under the equity financing model,the profit of product innovation is always greater than that of no product innovation.In this case,the manufacturer will definitely choose product innovation.2)The influence of financing related factors: under the bank lending mode,the increase of bank loan interest rate makes manufacturer reduce the amount of financing and the degree of product innovation efforts,and then inhibit his product innovation.In the equity financing mode,the effect of valuation level coefficient on product innovation is affected by tax.3)The impact of corporate income tax and related tax incentives: Regardless of the financing mode,corporate income tax-based reduction(R&D additional deduction ratio)promotes manufacturer to increase financing,improve product innovation efforts,and then incentivize product innovation.Because of the existence of the tax-based reduction of corporate income tax,corporate income tax rate has a restraining effect on the financing of manufacturer’s product innovation.4)The impact of value-added tax and related tax incentives: The impact of VAT and VAT tax reduction and exemption(VAT immediately levied and refunded ratio)on product innovation financing is influenced by corporate income tax and R&D additional deduction ratio,and whether the input VAT tax of R&D is deductible.5)The choice of financing mode : The choice of financing method is influenced by its own valuation,bank loan interest,consumer’s sensitivity coefficient to product innovation and manufacturer’s input cost coefficient.When the market has high recognition of product innovation,compared with bank lending mode,manufacturer can obtain a larger market share by choosing equity financing for product innovation.While manufacturer has high input cost coefficient and low R&D ability,he should choose the bank lending mode.The study of this paper provides a supplement for the research on the tax impact of product innovation supply chain,and also provides some theoretical reference for the choice of financing methods for product innovation and the government’s tax formulation.