Theoretical and Empirical Study on the Effects of Taxation and Subsidy Policies on R&D Efficiency and Scale

Abstract

This study conducts a comprehensive examination of the impacts of taxation and subsidy policies on research and development (R&D) efficiency and scale. Drawing upon theoretical frameworks from economics, public policy, and innovation management, this research investigates how taxation policies, such as R&D tax credits and deductions, and subsidy policies, such as government grants and incentives, influence the efficiency and scale of R&D activities within firms and industries. Through empirical analysis of firm-level data and industry-level indicators, this study assesses the effectiveness of different policy instruments in promoting R&D investment, innovation output, and productivity growth. Moreover, this research explores the mechanisms through which taxation and subsidy policies interact with firm characteristics, market conditions, and institutional contexts to shape R&D behavior and performance outcomes. The findings offer insights into the design and implementation of effective policy interventions to stimulate R&D activities and enhance innovation-driven growth in the economy. This study contributes to both theoretical understanding and practical implications for policymakers, business leaders, and other stakeholders involved in fostering a conducive environment for research and innovation.