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R&D subsidies, tax reductions and innovation outsourcing of enterprises

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  • Jin, Yue
  • Wang, Pengcheng

Abstract

As an important part of the innovation behavior of enterprises, innovation outsourcing is characterized by high technology, high threshold, and industry–university–research integration. Its status in the process of China's scientific and technological development has been continuously improved and it has received increasing attention and support through the government's innovation policies. This paper systematically tests the impact of research and development (R&D) subsidies and tax reductions on enterprises' innovation outsourcing. The results show that R&D subsidies and tax reductions can significantly increase enterprises' total amount and share of innovation outsourcing investment. An internal mechanism test shows that R&D subsidies can promote enterprises' innovation outsourcing by improving the adequacy of R&D funds and the quality of R&D staff. In addition, compared to the eastern region and non-state-owned enterprises, government subsidies have a more significant driving effect on innovation outsourcing in the central and western regions and for state-owned enterprises. The conclusions drawn in this paper provide an important empirical basis and policy reference for Chinese enterprises' internal and external innovation behaviors in the context of government innovation policies.

Suggested Citation

  • Jin, Yue & Wang, Pengcheng, 2024. "R&D subsidies, tax reductions and innovation outsourcing of enterprises," International Review of Financial Analysis, Elsevier, vol. 96(PB).
    • Handle: RePEc:eee:finana:v:96:y:2024:i:pb:s1057521924006161
    DOI: 10.1016/j.irfa.2024.103684
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