Additional Deduction For R&D Expenses And Total Factor Productivity Of Enterprises:Influence Mechanism And Collaborative Environment

Although China's economy is in transition from the rapid growth to the high-quality growth,the level of economic development is still constrained by many factors including increasing constraints on resources and environment,decline of traditional economic growth drivers,rising labor costs and etc.Therefore,how to improve total factor productivity is the decisive problem to be solved in the process of realizing high-quality economic development and promoting sustainable economic growth.The improvement of enterprise total factor productivity,which serves as the micro subject of improving quality and efficiency is of great importance.The outlook that enhancing total factor productivity functions as the focus of supply-side structural reform has been repeatedly pointed out by Xi Jinping.And the report of the 19 th CPC National Congress has also clearly stated that "we must insist on quality first and give priority to benefit,take supply-side structural reform as our main task to promote reform of economic and developmental quality,efficiency revolution as well as momentum reform for the purpose of raising total factor productivity." It,therefore,can be seen that whether enterprises' total factor productivity can be risen and how the improvement effect is are closely related to the reform of efficiency,quality and driving force of China's economic development,effecting the result that whether the economic transformation and development can be promoted smoothly.In order to enhance the total factor productivity of enterprises,the Chinese government has successively introduced and refined a series of preferential tax policies,among which the additional deduction of R&D expenses constitutes one of the most effective tax incentive measures,effectively driving the transformation of economic growth pattern and the increasing of enterprises' economic benefits.1996 has witnessed the initial enforcement of the additional deduction of R&D expenses in China.Policies have been adjusted for several times,like the definite additional deduction shares at 50%in 2005,the surging to 75% on deduction ratio of technological-oriented middle and smallsized enterprises in 2017,the increasing of additional deduction of R&D expenses to 75%enforced in all enterprises in 2018,and the increasing to 100% of additional deduction of R&D expenses towards manufacturing industry in 2021.The policy of additional deduction of R&D expenses has been implemented for many years,rendering the universal attention on its efficiency and outcome.Hence,questions presented are as follow: will the additional deduction of R & D expenses influence the total factor productivity of enterprises? Is there an intermediary effect between technological progress,efficiency of resource allocation and organizational management level? Does the development degree of factor market,the government's support on scientific research and the "replacing business tax with valueadded tax" policy and other relevant environmental factors have a synergistic effect with the additional deduction of R & D expenses,jointly stimulating the promotion of enterprise's total factor productivity? Are those relationships above mentioned opposite on account of the nature of enterprise property rights,life cycle and factor endowment? The importance of responses of questions mentioned above to stimulate the total factor productivity of microcosmic body and then foster the high quality development of macro economy can never be exaggerated,whilst only rare dissertations have conducted deep and detailed research regarding to former questions.Under basic condition,taking A-shared list companies from 2007 to 2019,the dissertation combines the theoretical research to empirical test to study in terms of the influence of additional deduction of R&D expenses against enterprises' total factor productivity.It is now listed below.(1)Based on theories regarding market failures and tax stimulation,the effect of additional deduction of R%D expenses against enterprises' total factor productivity is examined so as to make comprehensive evaluation to effectiveness of policy and conduct dimensional comprehensive index of additional deduction of research and development expenditure.(2)Supported by technological innovation theory,resource allocation theory and resource-based theory,the mechanism of action of additional deduction of R&D expenses towards total factor productivity is explored from the three perspectives: technological progress,efficiency of resource allocation and the level of organizational management.(3)Under the synergy theory,rent-seeking theory and information asymmetry theory,the synergistic effect caused by additional deduction of R&D expenses and related environmental elements to enterprises' total factor productivity is analyzed from the development degree of factor market,governmental support to scientific research and value-added tax policy.In addition,The variation among the nature of enterprises' property right(stated-owned firm and no-state-owned firm),life cycle(startup stage,growth stage and maturation stage),factor intensity(technology intensity,capital intensity and labor intensity and other related questions under heterogeneity).The empirical research found that:(1)the increasing of enterprises' total factor productivity could be effectively fostered through the intensity,availability,continuity,inclusiveness of additional deduction of R&D expenses and domino effect of overall policies.Under the property variation,the enforcement against additional deduction of R&D expenses has effectively raised the total factor productivity and fostered the highquality development of enterprises,state-owned or non-state-owned.With the variation of enterprises' life cycle,there were stimulative effect against enterprises' total factor productivity caused by additional deduction of R&D expenses for enterprises in growth stage and maturation stage.Under the difference of factor intensity,it has been found according to the differentiation of coefficient among groups that its stimulative effect was more powerful in capital-intensive enterprises,proving that tax reduction of additional deduction of R&D expenses could offer sufficient founds for enterprises.(2)Technological progress,resource allocation effectiveness and organizational management level have played the role of mediator in the relation between additional deduction of R&D expenses and enterprises' total factor productivity.However,in state-owned and labor-intensive enterprises,organizational management did not function as mediating effect;technological progress for enterprises in maturation stage served as complete mediating effect;In statedowned,capital-intensive,technological-intensive enterprises and others in the stage of maturation,technological progress,resource allocation and organizational management level were all responsible for mediating effect in the relationship between additional deduction of R&D expenses and enterprises' total factor productivity.(3)In regions with better factor market development and bigger scientific research support from government,the lower the stimulative effect of additional deduction of R&D expenses to enterprises' total factor productivity was.“Replace sales tax with value-added tax” policy and additional deduction of R&D expenses,with strong synergistic effect,raised enterprises' total factor productivity altogether.The effect of factor market development was minor in state-owned and technological intensive enterprises,whilst governmental science research support had great impact on those in the stage of maturation.In capital intensive enterprises,the synergistic effect of “replace sales tax with value-added tax” policy and additional deduction of R&D expenses was more obvious.Innovations mainly are demonstrated from following aspects :(1)Through in-depth study of the implementation of additional deduction of R&D expenses,quantitative analysis of the intensity,availability,sustainability and inclusiveness of additional deduction of R&D expenses,an index system for comprehensive measurement of additional deduction of R&D expenses is constructed according to relevant characteristics,which lays an important theoretical foundation for comprehensive measurement and scientific research,and also enriches the research literature on the economic consequences of the additional deduction of R & D expenses.(2)This dissertation clarifies the impact and function routes of additional deduction of R&D expenses on enterprise s' total factor productivity,reveals the internal mechanism of additional deduction of R&D expenses and the improvement of enterprises' total factor productivity,overcomes the lack of research on a single path,enriches the research scope of tax incentive mechanism,and provides a theoretical basis for improving core competitiveness and investment efficiency and optimizing the organizational management for enterprises.(3)The dissertation reveals the impact mechanism of additional deduction of R&D expenses and relevant environmental factors on enterprises' total factor productivity,deeply analyzes the synergistic effect of market and government on additional deduction of R&D expenses,and confirms the "effectiveness" of market and the "promising" of government.Besides,it also provides the empirical evidence for government departments to formulate relevant policies,gives full play to the decisive role of the market in resource allocation,creates an external environment conducive to the additional deduction of R&D expenses to promote the improvement of total factor productivity,and alleviates market failure.