The measure of government R&D tax incentive intensity and its effect verification in China

Science Research Management ›› 2011, Vol. 32 ›› Issue (9): 157-164.

The measure of government R&D tax incentive intensity and its effect verification in China

Wang Jun

School of Economics, Zhejiang Gongshang University, Hangzhou 310018, China

Received:2009-12-09 Revised:2010-06-28 Online:2011-09-27 Published:2011-09-22

Abstract

Abstract: The government R&D tax incentive intensity in China is calculated using METC, B index, and R&D cost. The outputs reveal that Chinese R&D tax incentive intensity lies in the middle class compared with major countries in the world. It is found that the impact of R&D tax incentive on enterprise R&D expenditure is significant after empirical verification using manufacturing industries data during the period of 1995-2008 in China. The incentive effects for high-tech enterprises are more significant. Policy implications are that Chinese government should make adjustments on the way of R&D funding, and gradually expand the scope of tax incentives for enterprises in order to reduce the proportion of direct funding by government.

Key words: R&D tax incentive, incentive intensity, impact effect

CLC Number:

F221

Wang Jun. The measure of government R&D tax incentive intensity and its effect verification in China[J]. Science Research Management, 2011, 32(9): 157-164.

References

[1] 冯·布朗. 创新之战[M]. 北京:机械工业出版社,1999: 8-15. [2] Bloom, N., Griffith, R., Reenen, John Van, Do R&D tax credits work? Evidence from a panel of countries 1979-1997[J], Journal of Public Economics, 2002, 85, 1-31. [3] Warda, J., Canadian R&D tax treatment: an international comparison , Vol, Resport, No, 125-194,1994, The Conference Board of Canada, Ottawa, Ontario. [4] Warda, J., Tax treatment of business investments in intellectual assets: an international comparison[J], OECD Science, Technology and Industry Working Papers,4. 2006. [5] Eisner, R., Albert, S., and Sullivan, M., The new incremental tax credit for R&D: incentive or disincentive?[J]. National Tax Journal, 1984, 37(2),171-185. [6] Berger, P., Explicit and implicit effects of the R&D tax credit[J], Journal of Accounting Research, 1993,31, 131-171. [7] Hall, B., Effectiveness of research and experimentation tax credits: Critical literature review and research design[J], Report to Office of Technology Assessment, Congress of the United States, 1995. [8] Dagenais, M., Mohen, P., Thierrien, P., Do Canadian firms respond to fiscal incentives to research and development[M], Tilburg University, Holland, Mimeo,1997. [9] Guellec, D., B. van Pottelsberghe, The impact of public R&D expenditures on business R&D[J], Economics of Innovation and New technologies, 2003, 12(3),225-244. [10] 朱平芳、徐伟民. 政府的科技激励政策对大中型工业企业R&D投入及其专利产出的影响——上海市的实证研究[J]. 经济研究,2003(6):45-53. [11] Lob, Peter D. and Vincent Lin, Research and development in the pharmaceutical industry-A specification error approach [J], Journal of Industrial Economics, 1977, 26(1): 45-51. [12] 吴延兵. R&D存量、知识函数与生产效率[J]. 经济学(季刊),2006,5(4):1129-1156. [13] Blundell, Richard, Rachel Griffith and Frank Windmeijer, Individual effects and dynamics in count data[J], Journal of Econometrics, 2002,108, 113-131. [14] Bosch, Mariano, Daniel Lederman and William F. Maloney, Patenting and research and development: A global view[J], World Bank Policy Research Working Paper, 3739, 2005.