Abstract：Promoting technological innovation is the necessary way for China to achieve high-quality development and build a new development pattern. In this context, exploring the influencing factors of corporate innovation has important theoretical and practical significance. Tax avoidance is an important tax planning strategy for firms. On the one hand, “values view” believes that tax avoidance can save internal cash flow of firms, so as to alleviate financing constraints and enhance corporate value; On the other hand, “agency view” believes that due to the separation of ownership and control in modern firms, tax avoidance may aggravate the behavior of management to grab private interests and have an adverse impact on firms. However, there is little literature on how tax avoidance affects the technological innovation behavior of firms.

Taking the A-share listed companies in Shanghai and Shenzhen stock markets from 2009 to 2018 as samples, this study empirically tests the impact of tax avoidance on corporate innovation, and uses a series of robustness tests, such as changing the estimation method, changing the measurement method of key variables, considering the interaction effect of industry and year, excluding special industries, and using independent variable disassembly method and placebo test to control the endogenous impact. On this basis, it further discusses the action mechanism, and tests the differences of the above relationship in firms with different internal and external supervision forces and ownership.

The results show that there is not a simple linear relationship between corporate tax avoidance and corporate innovation. With the increase of the degree of tax avoidance, corporate innovation presents an inverted U-curve change from rising to falling; The test results of the mechanism show that corporate tax avoidance affects financing constraints and environmental uncertainty through the U-curve, and then affects corporate innovation; Moreover, the inverted U-curve relationship between tax avoidance and innovation only exists in firm with strong internal and external supervision, while in firms with weak internal and external supervision, the more radical the tax avoidance behavior is, the lower the level of innovation is. Combined with

the nature of ownership, it is found that in state-owned firms, tax avoidance has an inverted U-shaped curve impact on innovation output, while in non-state-owned firms, tax avoidance significantly inhibits corporate innovation.

The research results not only expand the research on the influencing factors of corporate innovation and the impact of tax avoidance on micro corporate behavior, but also have certain enlightenment significance for a comprehensive understanding of the role of tax avoidance in corporate development and how to supervise corporate tax avoidance and promote corporate innovation in practice.

Keywords：corporate tax avoidance；corporate innovation；financing constraints；environmental uncertainty；internal and external supervision