Tax Reduction And Fee Reduction,R&D Investment And Enterprise Innovation Performance

In China’s implementation of macro-level control,the policy of cutting taxes and administrative fees is a key measure.Based on the overall economic situation and committed to long-term development,it starts from tax reform and has stimulated the vitality of market entities.Since the 19 th National Congress of the Communist Party of China,a series of taxes and administrative fees reduction policies have been successively introduced,which have achieved significant results and gained widespread recognition in society.However,since 2019,impacted by China-US trade friction and the COVID-19 pandemic,China’s economy has been facing tremendous downward pressure.As a response,the CPC Central Committee and the State Council released larger-scale universal and substantive measures to cut taxes and administrative fees,with the purpose to alleviate downward pressure on the economy and promote economic development.Manufacturing is a pillar industry of China’s domestic economy and an important reflection of national economic strength.Although China is one of the world’s largest manufacturer,there is still a large gap compared to the global advanced manufacturing level.Most manufacturing enterprises in China target maximum profits.Most enterprises,in the middle and lower reaches of the industry chain,are weak in independent innovation initiative and ability;instead,they rely heavily on the high-tech from outside China.This is the main bottleneck that restricts the manufacturing industry’s move towards the middle and high end.The improvement of independent innovation capability and transformation and upgrading of manufacturing industry vitally depend on taxes and administrative fees reduction.As a result,studying the impact of China’s taxes and administrative fees reduction policies on the innovation performance of manufacturing enterprises and the way to maximize the incentive effect of these policies is nowadays of great significance.This thesis begins with reviews of relevant work on taxes and administrative fees reduction,research and development R&D investment,and corporate innovation performance both domestically and abroad.Based on the tax reduction theory,sustainable development theory,and public finance theory in Western economics,it analyzes the relationship among taxes and administrative fees reduction,R&D investment,and innovation performance in the manufacturing industry,and proposes its own research hypothesis.A theoretical model is then established,and regression analysis and robustness tests are conducted using data from A-share listed manufacturing companies in the Shanghai and Shenzhen stock markets in China from 2017 to 2021.The sample companies are further grouped and analyzed by enterprise type and property rights to explore the impact of taxes and administrative fees reduction on innovation performance in the manufacturing industry.The results show that:(1)both taxes reduction and administrative fees reduction policies can significantly improve the innovation performance of manufacturing companies;the incentive effect of taxes reduction and administrative fees reduction policies on innovation performance is better for non-high-tech companies than for high-tech companies;the promotion effect of taxes reduction policies on innovation performance of state-owned manufacturing companies is greater than that of non-state-owned manufacturing companies,and the incentive effect of administrative fees reduction policies on innovation performance of non-state-owned manufacturing companies is greater than that of state-owned manufacturing companies.(2)Taxes reduction policies increase R&D investment by enterprises,while administrative fees reduction policies save R&D investment by enterprises.(3)R&D investment plays a partial mediating role between taxes reduction policies and innovation performance in the manufacturing industry,but has no mediating effect between administrative fees reduction policies and innovation performance.In the end,on the basis of theoretical analysis and empirical results,the following suggestions are proposed: First,from the government perspective:(1)put more effort into taxes and administrative fees reduction,and improve relative measures;(2)implement differentiated taxes and administrative fees reduction policies;(3)reduce taxes and administrative fees burdens and increase investment in basic research.Second,from the enterprise perspective:(1)actively strengthen R&D investment through various methods;(2)take advantage of taxes and administrative fees reduction policies to improve independent innovation capabilities.