This paper evaluates the incentive effect of preferential tax policies on enterprise innovation from the perspective of innovation chain, using panel data of Chinese listed companies from 2007 to 2019.The study found that preferential tax policy has a significant incentive effect on the innovation input, output and efficiency of the innovation chain. After replacing the estimation model and constructing instrumental variables, the research conclusions are still robust. In the heterogeneity analysis, the preferential tax policy has a stronger incentive effect on R&D investment in non-state-owned enterprises, while it has a stronger incentive effect on R&D personnel and enterprise innovation output in state-owned enterprises. The incentive effect of preferential tax policy for enterprises in high-tech industries is stronger than that in non-high-tech industries. The research of this paper adds new cognition to the innovative decision-making and optimization of preferential tax policies in enterprises, and provides useful inspiration for the implementation of innovation-driven development strategy.