The Metamorphosis of High-tech Enterprises——A study on Manipulation of R&D Based on Tax-reducing Incentives
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| Title | The Metamorphosis of High-tech Enterprises——A study on Manipulation of R&D Based on Tax-reducing Incentives
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| Author | Yang Guochao, Liu Jing, Lian Peng and Rui Meng |
| Organization | School of Accounting, Zhongnan University of Economics and Law；School of Management, Fudan University;East China University of Political Science and Law； CEIBS |
| Email | yang.guochao@outlook.com；12110690025@fudan.edu.cn；lianpeng82@gmail.com；oliver@ceibs.edu |
| Key Words | The Determination of High-Tech Enterprises; The threshold of regulation; R&D manipulation; R&D performance |
| Abstract | “Administrative Measures for the Determination of High-Tech Enterprises” establishes the quantitative criteria for High-Tech Enterprises, which is directly related to the huge preferential tax. In view of this, this paper studies the relationship between tax reduction policy and corporate R&D manipulation, and the influence of R&D manipulation on R&D performance. We find that in order to obtain preferential tax and government subsidies, the company will manipulate R&D investment to reach the threshold of the determination of the high-tech enterprises. This phenomenon is more pronounced for private firms, profit-making firms and firms located in weak tax enforcement provinces. Furthermore, compared with other firms, the firms with the ratio of R&D investment on sales just meet or beat the threshold of the determination of high-tech enterprises, its R&D investment and the number of patent applications or the number of patents authorized has a weaker positive correlation. The research shows that, depart from the original intention of policy makers, the tax reduction policy of high-tech enterprises will in part stimulate the management to manipulate R&D investment, which leads to the decline of R&D performance. This paper not only enriches the relevant research on threshold management of corporate earnings, but also provides a theoretical reference for the relevant departments to formulate and implement the policy of high-tech enterprises. |
| Serial Number | WP1219 |
| Time | 2017-09-05 |
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