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Do social insurance contribution rates affect firms’ investment in innovation?-Based on the empirical analysis of listed companies in Beijing

In: Proceedings of the 2024 9th International Conference on Social Sciences and Economic Development (ICSSED 2024)

Author

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  • Zeyi He

    (China Agricultural University, College of Economics and Management)

Abstract

Facing the burden of social insurance costs and innovation challenges faced by firms during China's economic transformation, this paper focuses on the Comprehensive Program for Reducing Social Insurance Premium Rates, which will be implemented in 2019, and examines its potential impact on firms’ investment in innovation. Based on the panel data of 317 listed companies in Beijing from 2018 to 2022, this paper analyzes the impact of pension insurance contribution rate adjustment on enterprises’ innovation investment through two-way fixed effect model. The results of the study reveal that under China's current social insurance investment, the incentive effect of social security contributions is greater than the cost effect, and a reasonable increase in social security contributions will “force” enterprises to expand their R&D investment, and there is a certain degree of heterogeneity in the response of different types of enterprises’ innovation investment to social security contributions. The findings of this paper are important for understanding the impact of social insurance policy adjustments on firms’ innovative behavior, which is conducive to the government's formulation of more effective social security policies to promote the optimization of economic structure and the enhancement of firms’ efficiency.

Suggested Citation

  • Zeyi He, 2024. "Do social insurance contribution rates affect firms’ investment in innovation?-Based on the empirical analysis of listed companies in Beijing," Advances in Economics, Business and Management Research, in: Radulescu Magdalena & Bootheina Majoul & Satya Narayan Singh & Abdul Rauf (ed.), Proceedings of the 2024 9th International Conference on Social Sciences and Economic Development (ICSSED 2024), pages 1116-1122, Springer.
    • Handle: RePEc:spr:advbcp:978-94-6463-459-4_124
    DOI: 10.2991/978-94-6463-459-4_124
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