Exploring the effect of VAT carryforward and refund policy on enhancing innovation efficiency among China's A-share listed firms

Yisong Huang, Ze Sun and Yan Huang

Finance Research Letters, 2025, vol. 72, issue C

Abstract: This research examines the effect of the VAT carry-forward tax refund policy on the innovation efficiency of A-share listed companies in China, spanning the period from 2015 to 2022. The findings indicate a notable enhancement in corporate innovation efficiency subsequent to the implementation of this policy. The policy's mechanism lies in fostering increased R&D investment, which, in turn, accelerates innovation. Notably, state-owned enterprises exhibit a more pronounced tendency to allocate additional funds towards enhancing their innovation efficiency in response to the VAT carry-forward tax refund policy.

Keywords: Value-added tax (VAT); VAT carry-forward tax refund; Corporate innovation efficiency; Financing constraints (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:72:y:2025:i:c:s1544612324015976

DOI: 10.1016/j.frl.2024.106568

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