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Tax policy reform and corporate innovation in China

Author

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  • He, Lerong
  • Jiang, Xiaozhen
  • Fang, Liting

Abstract

•Lower effective tax rates boost innovation.•The VAT tax reform has both direct and indirect effects on innovation.•Spillover effects from acquired technology encourage indigenous corporate innovation.•The effect of the tax reform varies with firm, industry, and regional characteristics.•The tax reform affects corporate innovation by influencing firm financing constraints, cash flow, and R&D personnel.

Suggested Citation

  • He, Lerong & Jiang, Xiaozhen & Fang, Liting, 2023. "Tax policy reform and corporate innovation in China," Finance Research Letters, Elsevier, vol. 55(PA).
    • Handle: RePEc:eee:finlet:v:55:y:2023:i:pa:s1544612323002635
    DOI: 10.1016/j.frl.2023.103891
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    References listed on IDEAS

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    Cited by:

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    3. Tang, Yajun & Wang, Li & Shu, Haicheng, 2024. "“Tax reduction” and the financialization of real enterprises: Evidence from China’s “VAT reform”," International Review of Economics & Finance, Elsevier, vol. 92(C), pages 835-850.
    4. Yu Lu & Yaqi Zhao & Yuhan Li & Yuhe Cao, 2023. "Direct Tax Burden, Financing Constraints, and Innovation-Based Output," Sustainability, MDPI, vol. 15(21), pages 1-21, October.

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