Scale Effect and Innovation Effect of New Energy Enterprises’ Value-Added Tax Incentives

Promoting the large-scale development and core technology research of the new energy industry is not only an inherent requirement for the high-quality development of the industry but also an important way to realize China’s carbon neutrality goal. Taking the VAT incentive policy as an example, this paper explores the relationship among new energy tax incentives, scale expansion, and technological innovation by constructing theoretical and empirical models, and further analyzes the intrinsic relationship between scale expansion and technological innovation under the policy incentives. There are three main findings. First, the VAT incentive helps promote the scale expansion of new energy enterprises, but does not promote technological innovation at the same time. Second, on the one hand, VAT incentives indirectly promote technological upgrading through positive incentives to the output scale, that is, the output effect. On the other hand, by raising the relative cost of R&D, the scale expansion replaces the technological innovation, that is, the substitution effect, and the substitution effect is stronger. Third, a strong internal innovative foundation and a better external innovative environment make the impact of VAT incentives less pronounced. The findings of this paper have significant implications. The first is to focus on the optimization of new energy tax incentives, focusing not only on industrial-scale development but also on cutting-edge technological innovation. Second, the intrinsic linkage between scale expansion and technological innovation in the new energy industry should be paid full attention to distinguish the output effect and substitution effect through the precise regulation of the policy. Third, a favorable space should be created for the transformation of the innovation achievements of new energy enterprises, to promote the high-quality development of the new energy industry.