Enterprise Tax Burden,Cash Holding And Corporate Investment Efficiency

As one of the three driving forces of economic development,high-efficiency investment is not only an important guarantee for sustainable development of enterprises,but also plays an important role in the healthy growth of national economy.However,in the real capital market,inefficient investment caused by information asymmetry and principal-agent conflict is widely present.Inefficient investment not only causes waste of resources and damages enterprise value,but also hinders sustainable development of enterprises and even affects national economic growth.As an important tool of government macro-control,the reduction of tax burden and fees brought by tax cuts and fee reductions policies will directly affect the investment decision-making behavior of micro-economic subjects and influence the efficiency of enterprise investment.The impact of taxation on enterprise investment efficiency has been mainly focused on studying the impact of tax incentives or tax preferences received by enterprises on investment efficiency and studying the impact of a single policy of a certain tax type or multiple policies of certain tax types on investment efficiency,but unfortunately few scholars have studied how enterprise tax burden affects enterprise investment efficiency under the background of tax cuts and fee reductions policies.In addition,investment is driven by cash,and cash held by enterprises as their "liquid blood" can provide a valuable source of funds for investment opportunities.Tax cuts and fee reduction policies have the effect of alleviating corporate financing constraints and bringing investment opportunities,which may prompt enterprises to adjust their cash holding policies and thus influence their investment decisions.So,in the background of the current large-scale tax cuts and fee reductions policy,what mechanism does the cash holding decision,as one of the major financial decisions,play in the relationship between corporate tax burden and corporate investment efficiency? At present,few scholars have conducted relevant discussions.Based on this,this paper analyzes the current situation and characteristics of corporate tax burden and investment efficiency as well as examines the impact and mechanism of corporate tax burden on corporate investment efficiency.The research finds that:(1)China’s tax cuts and fee reductions policy is mainly based on two major tax preferences,namely,transfer tax and income tax,and has broadly undergone four stages of evolution,and the scale of tax reduction has been expanded year by year.In this context,the tax burden level of the sample enterprises generally shows a decreasing trend,and the tax burden level of enterprises with high financing constraints,enterprises with high market competition and enterprises in the central and western regions is higher.(2)During the period under investigation,the investment efficiency of the sample enterprises tends to increase,and the investment efficiency of enterprises with high financing constraints,enterprises with high market competition and enterprises in the central region is higher.(3)The reduction of corporate tax burden in the background of tax cuts and fee reductions significantly contributes to the improvement of corporate investment efficiency.(4)The reduction of tax burden significantly reduces the level of corporate cash holdings.(5)Cash holdings play a partly mediating role in the relationship between corporate tax burden and corporate investment efficiency,and the mediating effect of cash holdings accounts for 6.81% of the total effect.(6)Further differentiation of firm heterogeneity reveals that the incentive effect of tax burden reduction on investment efficiency is more significant among firms with high financing constraints,firms with high market competition,and firms in the central and western regions than firms with low financing constraints,firms with low market competition,and firms in the eastern region.Based on the above findings,the article provides suggestions on how to implement a more effective tax reduction policy,promote the overall investment efficiency in China,and achieve industrial transformation and upgrading from both government and enterprise levels.