Research on the Game Decision of Enterprise Investment and Government Tax Revenue Based on Equilibrium Model Analysis

DOI

10.2991/978-2-38476-456-3_18How to use a DOI?

Keywords

enterprise investment; government tax; game decision-making model; equilibrium analysis of model

Abstract

Government intervention is prevalent in developing countries, with fiscal expenditures continuously increasing and the burden of government debt constantly growing. “Taxation” intervention focuses on production scale and short-term profits, especially as the traditional extensive growth model still plays a role in investment areas. Extensive investments characterized by repetitive construction and low-level investment continue to exert inertia on macroeconomic growth, making it difficult for the economy to stabilize in the short term without relying on extensive investment. Taxation on both operating income and profits, with a higher proportion on operating income, and accompany by incentivizes local governments to encourage enterprises to expand production scale investments. When the government has strong intervention capabilities over enterprises, it may lead to excessive investment. Although such investments may not significantly impact long-term corporate profits, the governments reduced focus on enterprise profits and increased tax expenditures might be a natural outcome of excessive investment nearly years, it is rather than a result of active government interference. This paper analyzes the decision-making models of enterprise investment and government taxation through game theory, focusing on equilibrium analysis and extended equilibrium analysis. Both government intervention and managerial self-interest are constrained by legal conditions and corporate governance, maintaining reasonable levels without compromising the goal of maximizing shareholder interests. The equilibrium analysis is divided into two parts, part one is the ideal state, and part two is the imperfect state, but it is closer to the real state. In the ideal state, corporate investment aims for long-term growth in shareholder returns. In the imperfect state, corporate investment seeks long-term expansion (maximizing government VAT revenue) and current profit growth (maximizing management interests). The overall conclusion is that both the government and corporate management should encourage companies to reduce inefficient investments rather than cut investments altogether.

Copyright

© 2025 The Author(s)

Open Access

Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

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TY  - CONF
AU  - Jiangyi Lv
AU  - Cherry Jiang
AU  - Nan Wang
PY  - 2025
DA  - 2025/08/25
TI  - Research on the Game Decision of Enterprise Investment and Government Tax Revenue Based on Equilibrium Model Analysis
BT  - Proceedings of the 5th International Conference on New Computational Social Science (ICNCSS 2025)
PB  - Atlantis Press
SP  - 153
EP  - 162
SN  - 2352-5398
UR  - https://doi.org/10.2991/978-2-38476-456-3_18
DO  - 10.2991/978-2-38476-456-3_18
ID  - Lv2025
ER  -