A Nonlinear Study on the Incentive Effect of R&D Tax Credit on Chinese Enterprise Productivity

R&D tax incentive policies is an important tool for implementing innovation-driven strategies. In-depth understanding of the incentive effect and internal logic of R&D tax credits on the productivity of innovative enterprises is closely related to building an innovative country and reshaping new development advantages. Based on the typical facts, this paper constructs a decision-making model for improving corporate’s total factor productivity（TFP） and includes R&D credit factors, and then uses the data of Chinese technology survey companies from 2008 to 2014 for empirical analysis. The study found that in China’s local innovative companies, there is a nonlinear relationship between the R&D tax credit intensity and the company’s TFP. Among the low-density enterprises, the R&D tax credit has significantly increased the enterprise TFP, while in the high-density enterprises, it has a restraining effect. Further, we verify that R&D tax deductions enhance corporate productivity through product innovation, while government intervention in the market suppresses the productivity incentive effect of R&D tax deductions. That is, “internal enterprise innovation” and “external government intervention” are the two channels through which R&D tax relief affects enterprise productivity nonlinearly. This research has added new knowledge for the implementation of more vigorous inclusive policies during the 14th Five-Year Plan period, and provided useful enlightenment for the improvement of enterprises’ technological innovation capabilities.