Macro tax burden, FDI, and national innovation efficiency: A study on the impact of macro tax burden on national innovation efficiency

Based on a panel dataset of 54 countries from 2008 to 2019, this article uses the mediation effect model to examine the relationship between macro tax burden, FDI and innovation efficiency. We find that:(i) the macro tax burden is positively correlated with the innovation efficiency; (ii) there is a non-linear effect of FDI on innovation efficiency conditional on macro tax rate. When the macro tax burden is greater than the critical value (25.28%), it indirectly limits innovation efficiency by hindering FDI inflows. This means that in order to promote innovation efficiency at the national level, the macro tax rate should be maintained at a reasonable level, because that can make the government raise more money to invest in and subsidy the innovation activities.