A Study on the Policy Effects of China's High-tech Enterprises Certification

中國高新技術企業認定政策效應研究

Student thesis: Doctoral Thesis

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Award date29 Sep 2021

Abstract

This thesis studies the impacts of China’s high-tech enterprises certification policy on corporate innovation and development and answers the following questions comprehensively: What are the effects on corporate innovation and development? What are the mechanisms between this certification policy and corporate innovation and development? What are the shortcomings of the certification policy? Based on the empirical analyses of China’s A-share listed firms from 2008 to 2017, the main contents and conclusions are as follows:

First, the thesis uses the fixed effects model to examine the policy effects of certification on inventions and green inventions. This thesis empirically shows that the certification policy decreases the quantity and quality of inventions and green inventions during the preferential tax period. Compared with non-high-tech firms, high-tech firms have a lower number of inventions in the first and fifth years before certification, higher quantity and quality of inventions in the next five years after the end of the tax incentive period, and higher quantity and quality of green inventions in the third, fourth, and fifth years after the end of the tax incentive period. Moreover, the negative effects of certification on the quantity and quality of inventions can be decreased through enhancing information transparency, and firms can directly increase the quantity and quality of inventions and green inventions through increasing R&D investment. Furthermore, there are heterogeneous impacts for the different versions of the certification policy, ownerships, and industries.

Second, we estimate the policy effects of certification on R&D performance through the propensity score matching method. The results show that the certification policy positively influences R&D input. Before certification, high-tech firms increase financial and manpower input. High-tech firms also increase financial and manpower input when they obtain policy dividends. After the expiry of the certification period, the financial input of high-tech firms is still significantly higher than that of non-high-tech firms for five consecutive years, and the manpower input of high-tech firms is only higher than that of non-high-tech firms for three consecutive years. Besides, the certification policy increases R&D input by policy dividends and signal transmission mechanisms. Specifically, the former encourages firms to increase R&D input through lower effective tax rates, higher government subsidies, and lower financing constraints, lower effective tax rates, higher government subsidies, and lower financing constraints, and the latter is by gaining venture capital, higher market attention, and higher information transparency. Moreover, the impacts of this policy on financial and manpower input are heterogeneous for different version policies, industries, and ownerships. Lastly, the certification policy has positive spillover effects on R&D input.

Third, the thesis analyses the impacts of this policy on corporate productivity by the FE-IV method. The results show that the certification policy has a significant incentive effect on corporate productivity. Before certification, high-tech firms’ productivity is significantly lower than that of non-high-tech firms. During the certification period, the certification policy significantly increases high-tech firms’ productivity. After the certification period expires, high-tech firms’ productivity is significantly higher than that of non-high-tech firms. Moreover, the impacts of the certification policy are different for ownerships, industries, financial constraints, etc. Furthermore, this policy promotes corporate productivity by increasing R&D input and patent output, and it has positive spillover effects.

Finally, this thesis also informs that the certification policy has many defects. The incentive effects of increasing financial and manpower input need enhancements, high-tech firms still have short-term behaviour in manpower input, firms adjust behaviours strategically according to the certification indicators, firms lack the motivation to conduct inventions and green inventions, and the incentive effects of the certification policy on some firms’ productivity need improvements.