Research On The Impact Of R&D Expense Deduction Intensity On Corporate Innovation

The Party’s twentieth National Congress emphasized the importance of adhering to the central position of innovation in the overall situation of China’s modernization,accelerating the implementation of innovation-driven development strategy,accelerating the achievement of a high level of scientific and technological self-sufficiency and self-improvement,and accelerating the construction of a strong country in science and technology.As the main body of innovation,the importance of enterprises is self-evident.In recent years,as the process of economic globalization accelerates and international competition becomes increasingly fierce,enterprise innovation has become one of the main means to enhance national competitiveness.In order to better guide and motivate enterprises to innovate,strengthen the support for innovation and create a good atmosphere for innovation in the whole society,China has launched a number of preferential fiscal and tax policies,among which the policy of R&D expenses extra deduction is an important element.Is this policy really beneficial to stimulate enterprises’ innovation and enhance their innovation ability?There have been many studies confirming that this policy can promote enterprises to increase their R&D investment and accelerate the growth of patent quantity.However,the growth of R&D investment and the number of patents does not represent the high quality innovation level of enterprises.Therefore,this thesis uses the data of A-share listed companies from 2013-2020 as a sample,and examines the effect of the policy from both the quantitative and qualitative perspectives of innovation output using a fixed-effects model to make certain additions and improvements to the existing studies.The empirical analysis finds that(1)the add-on deduction policy can produce a significant promotion effect on both innovation quantity and innovation quality,and the incentive effect on innovation quantity is stronger than that on innovation quality.The above findings still hold after the instrumental variables method,replacing the explanatory variables,and the robustness test of sub-sample regression.(2)Heterogeneity analysis reveals that different property rights nature,different geographical location,and different degree of financing constraints make significant differences in the effect of the policy.Specifically,the policy significantly increases the quantity and quality of innovation for non-SOEs,firms in the eastern region,and firms facing strong financing constraints,but the policy incentive effect is not significant for SOEs,firms in the central and western regions,and firms with low financing constraints.(3)From the results of the mediation analysis,the investment in R&D and the investment in R&D personnel both play a transmitting role in the quantity and quality of innovation stimulated by the policy.In order to maximize the innovation incentive effect of the add-on policy,the government can take the following measures:(1)Develop an innovation output-oriented add-on policy.The government can grant accrual deductions according to the level of innovation output of enterprises.If the enterprises have more patent applications or licenses,or the higher revenue brought by innovation output,they can enjoy a higher percentage of accrual deductions.(2)Develop a differentiated add-on deduction policy.Firstly,for non-state-owned enterprises,policy preferences should be further strengthened to encourage them to conduct high-quality R&D activities;while for state-owned enterprises,in addition to policy preferences,the government should be simplified and decentralized to encourage them to explore and try more actively in independent innovation and technology R&D.Secondly,the eastern region is economically developed and has strong technical innovation capability,so it should encourage enterprises to increase their R&D investment in key technology areas and accelerate the breakthrough of high-end technology industries;while for the central and western regions,the policies can be tilted to traditional industries and emerging industries to encourage enterprises to carry out technological innovation and transformation and upgrading.(3)Improve the intellectual property protection system.At the legal level,the government should,on the one hand,strengthen the formulation and improvement of intellectual property laws and regulations,and on the other hand,strengthen the enforcement of intellectual property rights,and combat intellectual property infringement by establishing and improving the reporting and complaint mechanism for intellectual property infringement.At the ideological level,we will vigorously promote the importance of intellectual property protection and raise the awareness of intellectual property rights in the whole society.