The Chinese economy is currently in a deep adjustment period characterized by weak external demand and subdued expectations. How to optimize the fiscal and tax governance mechanism to accurately facilitate the transformation and upgrading of enterprises has become a focal issue for both academia and the government.

Based on data from listed specialized and sophisticated enterprises from 2010 to 2022, this paper evaluates the driving effect of fiscal and tax policies. The empirical findings reveal that fiscal and tax policies are overall effective in incentivizing the growth of these enterprises, but the impact of different policy tools varies significantly across their lifecycles. Fiscal subsidies have a more direct effect on enterprises in the growth stage, effectively alleviating financing constraints and offsetting R&D risks, playing a key role in “timely helping”; tax incentives, on the other hand, are more significant in enhancing the competitiveness of enterprises in the mature stage, with tax reductions and rebates notably improving their production efficiency, demonstrating an “additional supporting” effect. The policy mix significantly boosts innovation performance. Further analysis shows that the promoting effect of fiscal and tax policies is stronger for specialized and sophisticated enterprises compared to non-specialized ones, highlighting the necessity of targeted policy regulation.

This paper makes the following contributions: From the perspective of the dynamic lifecycle, it investigates the differentiated incentive effects of fiscal and tax policies on specialized and sophisticated enterprises at various stages, effectively identifying pathways for targeted policy implementation. By comparing the incentive differences of fiscal tools across different stages, it explores the optimal policy mix for promoting the sustained development of enterprises. Furthermore, it identifies the different effects of fiscal and tax policies on specialized and sophisticated versus non-specialized enterprises, providing targeted evidence for enhancing the precision and efficiency of fiscal and tax policies for specific enterprise groups.

The implications of this paper are as follows: First, fiscal and tax policies are the most direct and effective tools for the government to support and guide innovative SMEs. Second, at different stages of the lifecycle, the key constraints and core concerns affecting the development of enterprises differ. Third, active exploration of an effective policy mix is crucial.