Tax Burden, Financing Constraints and Enterprise Innovation: An Empirical Study Based on World Bank Survey Data of Chinese Enterprises

Based on the World Bank's 2012 China enterprise Survey data, this paper examines the impact of tax burden on enterprise innovation. The research finds that tax burden promotes the innovation tendency of enterprises. Under the hypothesis of “poverty leads to change”, the increase of tax burden will aggravate the financing constraints of enterprises, and then stimulate enterprises innovation. The heterogeneity test finds that the tax burden has a more significant impact on large enterprises innovation. Therefore, government should encourage enterprises to dare to innovate and break through the dilemma.