Tax Reduction Incentive,Enterprise Investment and Capital Allocation Efficiency:Evidence from Small and Micro Business
China's small and micro enterprises are an important participant in the socialist mar-ket economy.They play an irreplaceable role in economic development,improving people's livelihood and increasing employment.Based on the 2010-2018 national tax survey data,this paper uses the difference-in-difference method to test the impact of the corporate income tax halved levy policy on the investment behavior of small and micro enterprises.The research shows that the income tax halved levy promotes the increase of fixed asset investment by enhancing the'investment motivation'and'investment ability'of small and micro enterprises,and the income tax halved levy policy has a more obvious effect on the investment of non-manufacturing enter-prises,enterprises without government subsidies and small and micro enterprises with strong financing constraints.Further analysis shows that the income tax halving policy has improved the capital allocation efficiency of small and micro enterprises and enhanced the ability of small and micro enterprises to absorb employment,but it has not enhanced the R&D innovation ability of small and micro enterprises.In general,this paper affirms the positive impact of the income tax halving levy policy on small and micro enterprises,and provides a useful reference for improv-ing the preferential tax policies for small and micro enterprises and promoting high-quality eco-nomic and social development.
Small and Micro EnterprisesIncome Tax Shall be HalvedInvestment by Enter-prisesEfficiency of Capital AllocationEmployment Effects
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