Study On Incentive Effect Of Income Tax Preferential Policy On Enterprise Performance Of High-tech Enterprises

Since the late 1980 s,China has gradually promoted the development of high-tech enterprises.For high-tech enterprises,effective implementation of R&D activities is an important factor to ensure their long-term development.However,due to the significant risks associated with innovation failure,enterprises tend to reduce their R&D activities,which is contrary to the country’s development strategy of encouraging independent innovation.To this end,China has introduced various measures,including a gradual increase in corporate income tax and a reduction in the tax burden,to encourage firms to invest in R&D and improve their innovation capabilities.Against this backdrop,this paper examines in detail the income tax incentives for high-tech firms in China.Then,Kehua Data Company is selected as a case study to examine the relationship between the company’s R&D status and its financial performance.The paper divides income tax incentive policies into direct and indirect incentives,takes R&D investment as a mediating variable,and chooses financial performance and innovation performance as the main indicators to measure the performance of high-tech firms,and profitability,ability to pay,operating capacity,growth capacity,quantitative growth and structural optimization as sub-indicators.Quantitative measurement of enterprise performance uses the entropy weighting method to explore the incentive effect of income tax incentives on the performance of high-tech enterprises.The study concludes that(1)the tax reduction effect of income tax incentives provides incentives for firms to expand their sources of capital and increase their R&D investment.In terms of incentive effects,the incentive effects of income tax incentives on R&D investment are larger than those on R&D personnel investment.According to the classification of income tax incentive policy,the incentive effect of indirect incentive policy on R&D investment is stronger than that of direct incentive policy on R&D investment.(2)From the incentive path,R&D investment improves firm performance by transforming results and commercializing products,and the incentive effect of firm innovation performance is stronger than the incentive effect of financial performance.In terms of innovation performance,both quantitative growth and structural optimization are improved,while the efficiency of R&D transformation remains essentially unchanged.In terms of financial performance,firms’ operating capacity and solvency improve and profitability gradually recovers,although it is affected by uncertainties,but R&D investment does not have a significant incentive effect on firm growth.(3)There is a lag between income tax incentive policies and R&D investment,with the lag being most pronounced in one period.There is also a lag between R&D investment and firm performance,with the most significant lag being two periods.This paper summarizes the above research findings,together with the problems identified in the case studies,and suggests appropriate improvements at the policy and firm level to further promote the incentive effect of income tax incentives for high-tech firms.