The research work of Prof. Tian and his co-authors Tax Incentive, R&D Investment and Firm Innovation Evidence from China has been published online in the internationally renowned Journal of Asian Economics (bimonthly, SSCI).
The paper examines the impact of tax incentives on R&D investment and innovation output, such as patents, against the backdrop of China's abolition of the restrictive rules on income tax deductions for corporate R&D investment in 2006. Based on patent matching data between Chinese industrial enterprises and the State Intellectual Property Office (SIPO), the research found that the gap between enterprises newly qualified for the add-on deduction and traditional enterprises is rapidly narrowing in terms of the output value of new products, as well as the number of patents, compared to enterprises that have traditionally benefited from the add-on deduction. Further analysis suggests that the change in tax burden is the central driver of these results and that manipulation of R&D investment by firms does not pose a threat to the underlying results. The study concluded that the introduction of universal tax incentives and the reduction of "one-size-fits-all" policy design would contribute to the long-term development of China's economy.
Journal of Asian Economics (JAE) was founded in 1990 by the American Council for Asian Economic Studies (ACAES) and has a journal impact factor of 1.797 (data from 2019 Journal Citation Reports). It is the leading academic journal in Asian economics research and is a ZUEL-approved Category-B English journal. JAE focuses on the unique characteristics of Asian economies in terms of institutional features, development paths, policy experiences or international interactions. It aims to raise the standard of research on Asian economies and to facilitate contacts between Asian economists and their global counterparts.