JOURNAL OF MANAGEMENT POLICY AND PRACTICE
“Chip War” Enlightenment: The Effect of Value-added Tax on Investment and Research and Development of High-tech Enterprises
Author(s): Qiaowan Wang, Ganlin Li, Hao Yang
Citation: Qiaowan Wang, Ganlin Li, Hao Yang, (2020) "“Chip War” Enlightenment: The Effect of Value-added Tax on Investment and Research and Development of High-tech Enterprises," Journal of Management Policy and Practice, Vol. 21, Iss. 1, pp. 33-41
Article Type: Research paper
Publisher: North American Business Press
In the trade war between China and the United States, the competitive position of high-tech industries has become increasingly prominent. We examine how high burden of China’s value-added tax (VAT) in hightech industry affects firms’ investment, R&D, and innovation. Study shows that: (1) the reduction of VAT tax burden significantly promoted business investment, R&D investment and technological innovation; (2) the "deductible" and "return" policies also significantly increased such activities (3) among the "chip" firms, the reduction of VAT has a significant positive effect on business investment; but its impact on technological innovation and R&D expenditure is not significant.