Tax incentives, market competition, and corporate innovation

Siyang Hu, Xingyu Zhou and Ping Li

Finance Research Letters, 2025, vol. 77, issue C

Abstract: Using data from A-share listed firms from 2013 to 2022, this study examines the relationship between tax incentives, market competition, and corporate innovation. Findings reveal that tax incentives significantly encourage corporate innovation. When market rivalry is included as an intermediary variable, tax incentives promote innovation by increasing market competitiveness. Furthermore, the effect of tax incentives on innovation shows significant variety, owing to changes in governance systems and industry features. Finally, based on the research findings, corresponding recommendations are put forward, aiming to provide references for the development of listed companies in China and for government decision-making.

Keywords: Tax incentives; Market competition; Corporate innovation; Mediating effect (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:77:y:2025:i:c:s1544612325003319

DOI: 10.1016/j.frl.2025.107067

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