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How do tax incentives affect intellectual capital efficiency? Empirical evidence from China

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  • Fu, Chuanrui
  • Tian, Mohan
  • Wu, Sijing
  • Wang, Zhihua
  • Ye, Ting

Abstract

In the transition to a knowledge-driven economy, intellectual capital (IC) underpins firms’ long-term value creation. This paper examines how tax incentives affect intellectual capital efficiency (ICE). The results show that tax incentives significantly enhance ICE. This positive effect is moderated by internal control quality and market competitive position: it is more pronounced in firms with high-quality internal controls and stronger competitive positions. Heterogeneity analysis further reveals larger effects among non-state-owned enterprises and high-tech firms. Mechanism tests indicate that tax incentives improve ICE primarily by alleviating corporate financing constraints, and they boost the value-added efficiency of both human capital and structural capital simultaneously.This study extends the literature on ICE determinants from a macroeconomic policy perspective, and provides empirical evidence and policy implications for emerging economies seeking to optimize tax incentive systems and advance knowledge-based economic upgrading.

Suggested Citation

  • Fu, Chuanrui & Tian, Mohan & Wu, Sijing & Wang, Zhihua & Ye, Ting, 2026. "How do tax incentives affect intellectual capital efficiency? Empirical evidence from China," Economic Analysis and Policy, Elsevier, vol. 93(C), pages 1406-1423.
    • Handle: RePEc:eee:ecanpo:v:93:y:2026:i:c:p:1406-1423
    DOI: 10.1016/j.eap.2026.08.045
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