Exploring fiscal incentives, financial constraints, and firm innovation performance: A multidimensional correlation analysis and mechanism exploration

The article study selects the panel data of 3407 A-share listed companies between 2010 and 2022, aiming at exploring the impact of fiscal incentives on firms' innovation performance and revealing the mediating role of financing constraints. The empirical results show that fiscal incentives have a significant positive impact on both corporate innovation performance and financing constraints; meanwhile, corporate financing constraints are found to play a fully intermediary role between fiscal incentives and corporate innovation performance. This research result is of great significance to both enterprises and governments. Enterprises can take the initiative to utilize fiscal incentives to improve innovation performance, strengthen financing ability, and then promote enterprise development. The government can take fiscal incentives and other measures to support enterprise innovation and promote the healthy development of the national economy. At the same time, governments should also explore more effective financing mechanisms to provide enterprises with a favorable financing environment to further promote enterprise development and innovation capacity.