Reseerch On The Improvements On Tax Incentive Policies Of Strategic Emerging Industry In Shandong Province

Developing strategic emerging industries is an important strategic decision at the national level with the background of fierce international competition and domestic economic transformation. In order to promote the development of strategic emerging industries, the government has issued a series of tax incentive policies. But whether these policies can truly function well is an issue that deserves deeper research.This paper first introduces the definition and characteristics of strategic emerging industry and then reviews the theoretical basis of tax incentive policies to promote the development of strategic emerging industry, including market failure theory, Keynesian theory and new economic growth theory. Based on this theory and the development of strategic emerging industry in Shandong Province, selecting two taxes (e.g. income tax and value-added tax) as independent variables and using 28 strategic emerging enterprises and 117 non-strategic emerging enterprises in Shandong Province as the sample, the paper explores the impacts of tax incentives on R&D investment and firm performance and the impacts of income tax incentives and value-added tax incentives on corporate profitability and investment in the micro perspective. Through regression analysis and comparative analysis, the results are as follows:income tax has a significant effect on R&D investment of strategic emerging enterprises while value-added tax has a non-significant effect; income tax has a significantly positive impacts on R&D staff input of strategic emerging enterprises while value-added tax has a non-significant effect; income tax burden has a significantly positive correlation with firm performance of strategic emerging enterprises, but value-added tax burden has a significantly negative correlation with firm performance of strategic emerging enterprises; R&D investment shows a positive impact on firm performance of strategic emerging enterprises; the impacts of income tax incentives on the profitability and investment of strategic emerging enterprises are not significant; there is a negative relationship between value-added tax incentives and the profitability of strategic emerging enterprises and a positive relationship between value-added tax incentives and investments of strategic emerging enterprises.To sum up, tax incentive policies have a positive effect on the performance of strategic emerging enterprises to some extent, but there still is some deficiencies in the process of the policy establishment and implementation. Therefore, this paper draws lessons from foreign developed countries and puts forward countermeasures and suggestions to improve tax incentive policies of strategic emerging industry in Shandong Province.