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Can tax reduction incentive policy promote corporate digital and intelligent transformation?

Author

Listed:
  • Ding, Qiaoying
  • He, Wensheng
  • Deng, Yanfang

Abstract

Digital intelligence has provided companies a great opportunity to develop a distinct and differentiating competitive advantage. Using the difference-in-differences approach, this study investigated the relationship between implementing tax reduction incentives policies and the digitalization and intelligence of A-share listed companies from 2016 to 2022. Results show that implementing a tax reduction incentive strategy can significantly improve the degree of digitalization and intelligence that companies display. Furthermore, financial flow systems and resource complementarity are expected to contribute to positive results. By encouraging human resource development and providing financial support through resource expansion, tax reduction incentives have assisted businesses in digital transformation. Concurrently, the tax reduction incentive policy helps enterprises in stabilizing their expected cash flow, reducing their financing challenges, and providing critical assurance for the acceptance and development of digital technology. This helps the company transition to digital intelligence. Moreover, the degree of urban digital infrastructure, the type of industry, and companies' reliance on external financing exhibit different mediating effects. The study results have practical relevance for companies' digital and intelligent transformation.

Suggested Citation

  • Ding, Qiaoying & He, Wensheng & Deng, Yanfang, 2025. "Can tax reduction incentive policy promote corporate digital and intelligent transformation?," International Review of Financial Analysis, Elsevier, vol. 99(C).
    • Handle: RePEc:eee:finana:v:99:y:2025:i:c:s1057521925000195
    DOI: 10.1016/j.irfa.2025.103932
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