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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Main Authors: Chan, Wilton A., Gan, Jenna Lynne N., Lucman, Mishari Rashid M., Portugal, Frenz Ralph Philip T.
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Language:English
Published: Animo Repository 2016
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Online Access:https://animorepository.dlsu.edu.ph/etd_bachelors/9937
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Institution: De La Salle University
Language: English
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spelling 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
institution De La Salle University
building De La Salle University Library
continent Asia
country Philippines
Philippines
content_provider De La Salle University Library
collection DLSU Institutional Repository
language English
topic Research and development tax credit
Tax incentives
spellingShingle 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
description 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
format 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.
author_sort 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
publisher Animo Repository
publishDate 2016
url https://animorepository.dlsu.edu.ph/etd_bachelors/9937
_version_ 1712577241464963072