Regression analysis of tax preferences and innovation based on two-way fixed effects model —— Evidence from China

Based on the panel data of Shanghai and Shenzhen A-shares from 2008 to 2017, this paper establishes the two-way fixed effects model to verify the long-term incentive effect of tax preferences on enterprise innovation. The results show that tax preferences are not only conducive to the incentive of current innovation, the incentive effect on future innovation increases year by year. The longer an enterprise enjoys tax preferences, the more conducive it will be to its future innovation, and tax preferences have significant long-term effects on innovation.