The Influence of Technology Tax Policy on Technological Innovation Cost Input of A-Share Listed Enterprises

Abstract

Technological innovation serves as a critical driver for enterprise competitiveness and economic growth, yet market mechanisms often fail to provide sufficient incentives due to high costs, risks, and long R&D cycles. Government intervention through science and technology tax policies has emerged as a pivotal tool to mitigate these challenges and stimulate corporate innovation. This study examines the impact of tax policies on R&D Expenditure among A-share listed enterprises in China, aiming to elucidate the role of fiscal incentives in fostering R&D investment. Utilizing data from 3,599 A-share listed firms between 2018 and 2023, sourced from the China Statistical Yearbook and CSMAR database, the research employs a multiple linear regression model to analyze the relationship between Income Tax Expense Ratio (ITER) (measured by the ratio of actual income tax paid to total profit) and R&D intensity (measured by R&D expenditure relative to operating revenue). Control variables include sales margin (SM), asset-liability ratio (ALR), and Logarithm of Net Assets (LNA). The results reveal a significant negative correlation between ITER and R&D expenditure, confirming that tax incentives effectively promote innovation investment by alleviating financial pressures. Robustness tests further validate these findings, demonstrating that reduced ITER correlate with higher R&D spending. The study underscores the importance of targeted tax policies in enhancing corporate innovation capabilities and advancing China's high-quality economic development. By providing empirical evidence on the efficacy of tax incentives, this research contributes to policy design aimed at sustaining long-term technological progress and industrial upgrading.