Digitalization of Tax Administration and Corporate Innovation: Evidence from a Quasi-Natural Experiment based on the Golden Tax Phase III

Abstract

The Golden Tax Phase III is a significant initiative in China's digital tax administration reform. To thoroughly investigate its impact on the innovation activities of Chinese enterprises, particularly the heterogeneous effects across different ownership structures, this study relies on a quasi-natural experiment based on the phased implementation of the Golden Tax Phase III. It employs a sample of A-share listed companies from 2007 to 2019 to examine the direct effects of digitalized tax administration on corporate innovation investment, supplemented by a series of robustness tests to ensure the reliability of the conclusions. The results indicate that digitalized tax administration generally suppresses the innovation investment of Chinese enterprises, with the inhibiting effect being more pronounced in non-state-owned enterprises. This finding provides important empirical references and decision-making basis for government departments to optimize regulatory strategies and balance tax administration with corporate innovation vitality in the era of digital economy.