Why the Company didn’t have the Sustained R&D Tax Reduction and Exemption?
Read
DownLoad |
| Title | Why the Company didn’t have the Sustained R&D Tax Reduction and Exemption?
|
| Author | Wang Chong and Jiang Xiaoyun |
| Organization | Shanghai University of Finance and Economics ;University of Shanghai for Science and Technology |
| Email | 13813915506@126.com；xiaoyunj_nj@163.com |
| Key Words | Sustained R&D Tax Incentive; Reduction Admittance; Reduction Sustainability; Endogenous Treatment Effect Model; Instrumental Variable Method |
| Abstract | Starting from the virtuous circle of tax incentive and enterprise R&D, this paper studies the sustainability of the R&D tax reduction and exemption, including the qualification of high and new technology enterprises. The generalized Heckman Selection Model is used to identify the enterprise selection under R&D tax reduction admittance, and the endogenous treatment effect model is set up to study whether or not the reduction and exemption on the enterprise can sustain. The study found that the expansion of corporate revenue in the joint action of corporate selection and tax incentives significantly improved the possibility that the enterprise could not continue to gain for the next year. Its mechanism of action is a profit constraint effect - the double restriction of the proportion threshold condition and the annual persistence requirement. The decline of the profitability index with the revenue scale as the denominator undermines the ability of the enterprise to continue to meet the condition of recognition in the next year, which eventually makes the expansion of the revenue scale cause higher unsustainability. The admittance of R&D tax reduction and exemption constitutes the internal reason for enterprises' unsustainable reduction and exemption, resulting in the self-weakening effect of the reduction and exemption policy. The research provides useful enlightenment for China to implement the innovation driven strategy and build an innovative country. |
| Serial Number | WP1350 |
| Time | 2019-03-22 |
|