Does tax symmetry improve corporate innovation investment? Evidence from the change policy of loss carrying forward period in China

Abstract

Taking China's A-share listed companies with high-tech enterprise qualification from 2015 to 2020 as a sample, we find that the increase of tax symmetry can significantly improve enterprise innovation investment; agency conflict has a significant negative regulatory effect. Further, this paper empirically tests the role path of tax symmetry on enterprise innovation investment. The results show that tax symmetry mainly promotes the level of enterprise innovation investment by improving the level of enterprise risk-taking, which supports the government's "sleeping partner" hypothesis. Therefore, it is suggested that the government should enhance tax symmetry and act as a "sleeping partner" of enterprises, which has important enlightenment significance for stimulating enterprises to increase their enthusiasm for innovation. Under the background of China's emerging economy, this study will contribute to the references of tax policies and enterprise innovation.