A study on R&D expenditure decisions in developing economies: Tax incentives and earnings
The significant economic externalities of private companies performing R&D justify the provision of special tax incentives, even in developing economies. We provide evidence on the impact of tax incentives and financial constraints on corporate R&D expenditure decisions. Exploiting cross-cou...
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oai:animorepository.dlsu.edu.ph:etd_bachelors-105822021-08-23T02:30:59Z A study on R&D expenditure decisions in developing economies: Tax incentives and earnings Chan, Wilton A. Gan, Jenna Lynne N. Lucman, Mishari Rashid M. Portugal, Frenz Ralph Philip T. The significant economic externalities of private companies performing R&D justify the provision of special tax incentives, even in developing economies. We provide evidence on the impact of tax incentives and financial constraints on corporate R&D expenditure decisions. Exploiting cross-country differences in Malaysia, Indonesia and the Philippines, we appraise the impact and cost-effectiveness of the R&D tax incentives implemented. We find, for 275 Malaysian firm- years, 68 Indonesian firm-years and 68 Philippine firm-years, that R&D tax incentives of Malaysia have a positive impact on the level of R&D spending and are cost-effective as its credit system induces, on average, $2.005 of additional R&D spending per dollar of taxes forgone. Consistent with the R&D investment model, providing tax incentives in the form of tax credit will decrease financial constraints that may limit the total investments made, and allow more R&D projects to be undertaken. This evidence has important implications for governments to adopt a similar tax policy providing constant incentives that can encourage private R&D investments 2016-01-01T08:00:00Z text https://animorepository.dlsu.edu.ph/etd_bachelors/9937 Bachelor's Theses English Animo Repository Research and development tax credit Tax incentives |
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Research and development tax credit Tax incentives Chan, Wilton A. Gan, Jenna Lynne N. Lucman, Mishari Rashid M. Portugal, Frenz Ralph Philip T. A study on R&D expenditure decisions in developing economies: Tax incentives and earnings |
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The significant economic externalities of private companies performing R&D justify the provision of special tax incentives, even in developing economies. We provide evidence on the impact of tax incentives and financial constraints on corporate R&D expenditure decisions. Exploiting cross-country differences in Malaysia, Indonesia and the Philippines, we appraise the impact and cost-effectiveness of the R&D tax incentives implemented. We find, for 275 Malaysian firm- years, 68 Indonesian firm-years and 68 Philippine firm-years, that R&D tax incentives of Malaysia have a positive impact on the level of R&D spending and are cost-effective as its credit system induces, on average, $2.005 of additional R&D spending per dollar of taxes forgone. Consistent with the R&D investment model, providing tax incentives in the form of tax credit will decrease financial constraints that may limit the total investments made, and allow more R&D projects to be undertaken. This evidence has important implications for governments to adopt a similar tax policy providing constant incentives that can encourage private R&D investments |
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text |
author |
Chan, Wilton A. Gan, Jenna Lynne N. Lucman, Mishari Rashid M. Portugal, Frenz Ralph Philip T. |
author_facet |
Chan, Wilton A. Gan, Jenna Lynne N. Lucman, Mishari Rashid M. Portugal, Frenz Ralph Philip T. |
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Chan, Wilton A. |
title |
A study on R&D expenditure decisions in developing economies: Tax incentives and earnings |
title_short |
A study on R&D expenditure decisions in developing economies: Tax incentives and earnings |
title_full |
A study on R&D expenditure decisions in developing economies: Tax incentives and earnings |
title_fullStr |
A study on R&D expenditure decisions in developing economies: Tax incentives and earnings |
title_full_unstemmed |
A study on R&D expenditure decisions in developing economies: Tax incentives and earnings |
title_sort |
study on r&d expenditure decisions in developing economies: tax incentives and earnings |
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Animo Repository |
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2016 |
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https://animorepository.dlsu.edu.ph/etd_bachelors/9937 |
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