Can Tax Incentives Promote Corporate Digital Transformation? Evidence from China’s Accelerated Depreciation of Fixed Assets Policy

Abstract

The motivational effects of tax incentives in promoting corporate digital transformation have attracted significant attention. Drawing on data from A-share listed companies between 2012 and 2022, this study employs a staggered difference-in-differences model based on the accelerated depreciation policy for fixed assets to examine the impact of tax incentives on corporate digital transformation. The findings indicate that the accelerated depreciation policy significantly enhances digital transformation in enterprises and exhibits robustness across various tests. The policy facilitates corporate digital transformation by improving corporate vitality, increasing innovation investment, and enhancing profitability. Moreover, its effects are more pronounced for enterprises in growth and decline phases, highly competitive industries, and firms facing significant financing constraints. These findings provide valuable insights for the government’s fiscal and tax reforms aimed at empowering corporate digital transformation.