Research on the Incentive Effect of Tax Preference and Financial Subsidy on the Development of Integrated Circuit Industry

Yuntong Hu () and Fengwei Zhao ()
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Yuntong Hu: Southwest University of Political Science and Law, Business School
Fengwei Zhao: Southwest University of Political Science and Law, Business School

A chapter in Proceedings of the 2022 2nd International Conference on Economic Development and Business Culture (ICEDBC 2022), 2022, pp 77-89 from Springer

Abstract: Abstract Tax preference and financial subsidy, as the main policy tools for government departments to stimulate industrial development, play an important role in the definition of government and market under market economy. Compared with other industries, the high-end manufacturing industry represented by the integrated circuit industry has the characteristics of high investment, high risk and positive externality of scientific research results, which makes the fiscal and tax policies inevitably have different incentive effects on its industrial development. Based on the micro data of IC listed companies from 2011 to 2020, this paper analyzes the impact and differences of tax preferential policies and financial subsidies on the IC industry. The empirical study found that tax preference and financial subsidy have promoted the development of IC industry, and the incentive effect of tax preference is more significant. At the same time, by studying the incentive effect of the two policy tools on the important activities of integrated circuit enterprises, it is found that the two policy tools have a positive incentive on the R & D investment of integrated circuit enterprises, and the incentive effect of financial subsidies on Enterprise R & D is more obvious; There is no significant inhibitory effect on the investment of integrated circuit enterprises; Tax preference for enterprise financing shows positive incentive, while financial subsidies show inhibitory effect.

Keywords: tax preference; Financial subsidies; Integrated circuit industry; Incentive effect; Empirical analysis (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:spr:advbcp:978-94-6463-036-7_13

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DOI: 10.2991/978-94-6463-036-7_13

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