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Tax incentives and corporate technological innovation performance: An analysis from the perspective of R&D investment

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  • Wu, Zihang
  • Zeng, Ning
  • Song, Jiansong

Abstract

Tax incentives, as a key government policy tool to drive technological innovation, have become a focal point for both academics and policymakers in recent years. This study analyzes the influence of tax incentives on corporate technological innovation performance using data from publicly listed companies over the period from 2006 to 2022. Our findings suggest a positive relationship between tax incentives and innovation performance, with the policy's effectiveness further enhanced by increased R&D investment. Additionally, this study reveals that green investors can strengthen the positive effect of tax incentives on technological innovation performance. Through a heterogeneity analysis, this paper explores how factors such as firm size, management model, artificial intelligence capability, corporate value, and company type influence the effectiveness of tax incentives. Results provide theoretical support for policymakers in designing more effective innovation-promoting policies and offer practical guidance for firms on how to leverage R&D investment and attract green investment and environmentally friendly external capital in response to policy changes.

Suggested Citation

  • Wu, Zihang & Zeng, Ning & Song, Jiansong, 2025. "Tax incentives and corporate technological innovation performance: An analysis from the perspective of R&D investment," International Review of Economics & Finance, Elsevier, vol. 102(C).
    • Handle: RePEc:eee:reveco:v:102:y:2025:i:c:s1059056025004861
    DOI: 10.1016/j.iref.2025.104323
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    Keywords

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    JEL classification:

    • H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • M54 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Labor Management

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