Tax incentives, R&D investment and employment

This paper investigates the mechanisms of tax incentives and R&D investments on employment, constructs a panel data model with a sample of 4,255 Chinese technology-based SMEs, and adopts a fixed effect model for empirical evidence after various types of tests. The research results show that tax incentives and R&D investments in technology-based SMEs positively affect their employment. The positive effect is reflected in the current period and remains valid in the next period. R&D investment, operating profit margin, and remuneration positively impact employment, while we should focus on controlling and reducing overhead costs. Finally, corresponding suggestionsand countermeasures are given from three levels: government, enterprises, and society.