Tax Incentives, R&D Manipulation, and Corporate Innovation Performance: Evidence from Listed Companies in China
This study investigated the R&D manipulation of Chinese listed companies under preferential tax policies based on the bunching approach. On this basis, differences in organizational performance aspirations were used to distinguish firm heterogeneity. This was to clarify how tax incentives affect...
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MDPI AG
2021
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oai:doaj.org-article:50e4f303fc6c4a0a9b32984c24bda0a42021-11-11T19:31:07ZTax Incentives, R&D Manipulation, and Corporate Innovation Performance: Evidence from Listed Companies in China10.3390/su1321118192071-1050https://doaj.org/article/50e4f303fc6c4a0a9b32984c24bda0a42021-10-01T00:00:00Zhttps://www.mdpi.com/2071-1050/13/21/11819https://doaj.org/toc/2071-1050This study investigated the R&D manipulation of Chinese listed companies under preferential tax policies based on the bunching approach. On this basis, differences in organizational performance aspirations were used to distinguish firm heterogeneity. This was to clarify how tax incentives affected firm innovation performance. The empirical results show that preferential tax policies can effectively reduce the actual tax burden of high-tech enterprises. Some companies have enjoyed corporate income tax breaks by manipulating R&D spending. The counterfactual estimate of R&D intensity shows that the elasticity of taxable income of R&D investment of listed companies in China is between 0.55 and 0.8. The elasticity of taxable income of manufacturing enterprises is between 0.6 and 0.75. Furthermore, within the R&D operating range, firm-level variations will affect innovation performance. The incentive effect of R&D activities of enterprises with a negative organizational performance aspiration gap is higher than that of enterprises with a positive organizational performance aspiration gap. The conclusion provides the basis for the country to improve preferential tax policies for high-tech enterprises.Wenyan SunKedong YinZhe LiuMDPI AGarticletax incentivesR&D manipulationorganizational performance aspiration gapinnovation performanceEnvironmental effects of industries and plantsTD194-195Renewable energy sourcesTJ807-830Environmental sciencesGE1-350ENSustainability, Vol 13, Iss 11819, p 11819 (2021) |
| institution |
DOAJ |
| collection |
DOAJ |
| language |
EN |
| topic |
tax incentives R&D manipulation organizational performance aspiration gap innovation performance Environmental effects of industries and plants TD194-195 Renewable energy sources TJ807-830 Environmental sciences GE1-350 |
| spellingShingle |
tax incentives R&D manipulation organizational performance aspiration gap innovation performance Environmental effects of industries and plants TD194-195 Renewable energy sources TJ807-830 Environmental sciences GE1-350 Wenyan Sun Kedong Yin Zhe Liu Tax Incentives, R&D Manipulation, and Corporate Innovation Performance: Evidence from Listed Companies in China |
| description |
This study investigated the R&D manipulation of Chinese listed companies under preferential tax policies based on the bunching approach. On this basis, differences in organizational performance aspirations were used to distinguish firm heterogeneity. This was to clarify how tax incentives affected firm innovation performance. The empirical results show that preferential tax policies can effectively reduce the actual tax burden of high-tech enterprises. Some companies have enjoyed corporate income tax breaks by manipulating R&D spending. The counterfactual estimate of R&D intensity shows that the elasticity of taxable income of R&D investment of listed companies in China is between 0.55 and 0.8. The elasticity of taxable income of manufacturing enterprises is between 0.6 and 0.75. Furthermore, within the R&D operating range, firm-level variations will affect innovation performance. The incentive effect of R&D activities of enterprises with a negative organizational performance aspiration gap is higher than that of enterprises with a positive organizational performance aspiration gap. The conclusion provides the basis for the country to improve preferential tax policies for high-tech enterprises. |
| format |
article |
| author |
Wenyan Sun Kedong Yin Zhe Liu |
| author_facet |
Wenyan Sun Kedong Yin Zhe Liu |
| author_sort |
Wenyan Sun |
| title |
Tax Incentives, R&D Manipulation, and Corporate Innovation Performance: Evidence from Listed Companies in China |
| title_short |
Tax Incentives, R&D Manipulation, and Corporate Innovation Performance: Evidence from Listed Companies in China |
| title_full |
Tax Incentives, R&D Manipulation, and Corporate Innovation Performance: Evidence from Listed Companies in China |
| title_fullStr |
Tax Incentives, R&D Manipulation, and Corporate Innovation Performance: Evidence from Listed Companies in China |
| title_full_unstemmed |
Tax Incentives, R&D Manipulation, and Corporate Innovation Performance: Evidence from Listed Companies in China |
| title_sort |
tax incentives, r&d manipulation, and corporate innovation performance: evidence from listed companies in china |
| publisher |
MDPI AG |
| publishDate |
2021 |
| url |
https://doaj.org/article/50e4f303fc6c4a0a9b32984c24bda0a4 |
| work_keys_str_mv |
AT wenyansun taxincentivesrdmanipulationandcorporateinnovationperformanceevidencefromlistedcompaniesinchina AT kedongyin taxincentivesrdmanipulationandcorporateinnovationperformanceevidencefromlistedcompaniesinchina AT zheliu taxincentivesrdmanipulationandcorporateinnovationperformanceevidencefromlistedcompaniesinchina |
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