Under the background of innovation-driven in China, in view of the fact that there are few studies on the impact of R&D tax reduction and exemption on financial constraints of enterprises, this paper absorbs the frontier perspectives of the financial constraint theory, and uses the endogenous treatment effect model including the triple difference method and the cubic Dose-Response function method to empirically study the impact of R&D tax reduction and exemption on financial constraints. This paper uses the asset size, which is the " strong endogenous variable”, as the proxy variable of financial constraints and the explanatory variable for investment to research the asset size effect of R&D tax reduction and exemption. We find that R&D tax reduction and exemption has a significant investment accelerator effect, and the cubic Dose-Response function between the reduction rate and the scale of assets also confirm the non-monotonic quadratic function effect through tax reduction for enterprises to invest. R&D tax reduction and exemption has a positive impact on the asset size and financial constraints, but also restricts the expansion of enterprise assets through labor factor compensation and the current period of profitability. At the same time, R&D tax reduction and exemption worsens the financial constraints of enterprises through labor factor rewards and current profitability. This paper provides beneficial enlightenment for the implementation of innovation-driven development strategy and industrial transformation and upgrading, and giving full play to the tax relief policy to support innovation-driven development.
The Impact of R&D Tax Reduction and Exemption on Financial Constraints of Enterprises and Its Functional Mechanisms: An Empirical Research Based on Micro-data of Chinese Enterprises
Journal of Finance and Economics Vol. 45, Issue 09, pp. 57 - 70 (2019) DOI:10.16538/j.cnki.jfe.2019.09.005
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Cite this article
Jiang Xiaoyun, Wang Chong, Gao Mengmeng. The Impact of R&D Tax Reduction and Exemption on Financial Constraints of Enterprises and Its Functional Mechanisms: An Empirical Research Based on Micro-data of Chinese Enterprises[J]. Journal of Finance and Economics, 2019, 45(9): 57-70.