Fiscal Subsidies And Innovation Performance Of Manufacturing Firms

The report of the 20 th Party Congress clearly puts forward innovation as the first driving force and emphasizes the importance of innovation to the overall national development.With a series of national policies,domestic enterprises have achieved rapid development in both innovation quantity and innovation quality,among which government subsidies and tax incentives are the two most commonly used incentive tools.It is of practical significance to explore and analyze the differences between these two tools in terms of innovation quantity and innovation quality to precisely formulate relevant incentive policies;revealing the mechanism differences between the two tools in terms of innovation quantity and innovation quality can provide theoretical basis for the state to formulate precise incentive tools.The motivation of innovation of enterprises is closely related to their industry background.In different industrial life cycle stages,the number of enterprises,the degree of innovation and financing constraints within the industry will change,and these changes will affect the innovation motivation and behavior of enterprises,which means that the two innovation incentive tools,government subsidies and tax incentives,have different incentive effects in different industrial life cycle stages.Based on this,the influence of industry life cycle is considered when examining the incentive effect of the two tools on innovation performance,and the innovation performance is subdivided into quantitative and qualitative aspects,which is conducive to the precise selection of the two incentive tools in terms of incentive targets,optimizing the allocation of financial and tax resources and achieving the maximum innovation performance.In the specific empirical analysis,this paper selects the A-share listed manufacturing industry from2011-2020 as the research sample and analyzes the impact of fiscal policy on the quantity and quality of corporate innovation using fixed-effect model.The findings show that: 1.in the overall sample,government subsidies can effectively promote the quantity and quality of innovation,while tax preferences can only promote the quantity of innovation,but have no significant effect on the quality of innovation;2.in terms of industrial life cycle,government subsidies have the greatest incentive effect on the quantity and quality of innovation of enterprises in the growth period,followed by the maturity period,and have no significant effect on the decline period;tax preferences only have the greatest incentive effect on the quantity and quality of innovation.Tax incentives only have an incentive effect on the quantity of innovation of the enterprises in the growth period,but not on the enterprises in the maturity and decline periods.3.The sample is divided into high-tech and non-high-tech enterprises,and on the whole,both government subsidies and tax incentives have a stronger incentive effect on the quantity and quality of innovation of high-tech enterprises.From the perspective of different regions,both government subsidies and tax incentives have the strongest incentive effect on the quantity and quality of innovation of enterprises in the eastern region;combined with the industry life cycle,both subsidies have the strongest incentive effect on the enterprises in the eastern region in the growth period.Based on the above findings,the following points should be taken into consideration when using government subsidies and tax incentives to stimulate enterprise innovation: 1.In terms of the effect of incentive tools,government subsidy policy is more effective,so government subsidy can be considered as the main incentive for enterprise innovation,supplemented by tax incentives.2.More emphasis should be placed on supporting the quality of innovation.When assessing the eligibility of enterprises for subsidies,the proportion of invention patents should be appropriately increased.3.From the perspective of industrial life cycle,for mature industries,continue to increase government subsidies and tax incentives to support enterprises in mature industries to improve their innovation performance and increase the quality and growth potential of China’s economic growth For maturing industries,reduce policy intervention,use government subsidies appropriately,designate areas and uses of funds,and accelerate the transformation of enterprises’ innovation achievements;for declining industries,encourage them to improve their production methods,guide them to achieve technological improvements through innovation,and realize industrial transformation and upgrading.4.Provide guidance and support to non-high-tech enterprises,encourage them to strengthen their talent pool,and actively help non-high-tech enterprises for R&D projects.5.Coordinate the coordinated development among regions,promote the transformation and upgrading of traditional industries in central and western regions,emphasize the core position of scientific and technological innovation,enhance the transparency of market information,and reduce the innovation cost of enterprises in central and western regions in order to make better use of fiscal and tax policies.