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The impact of research and development promotion schemes in the Taiwanese electronic component industry

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Abstract:

This paper explores the effect of government research and development (R&D) promotion schemes on R&D expenditures in the electronic component industry. We investigated the impact of three promotion tools: R&D tax credits, exemption from tariffs, and accelerated depreciation. A total of 124 firms was interviewed. A two-limit model was used in the data analysis.

Our empirical analysis indicates the scheme generated a rate of increase in industrial R&D investments of about 16%. Furthermore, on average, the impacts of R&D tax credits, exemption from tariffs, and accelerated depreciation, were about 10%, 4%, and 2%, respectively. In addition, we found that the larger the firm, the weaker the influence of the promotion scheme on R&D expenditures in the industry.

Document Type: Research Article

DOI: http://dx.doi.org/10.1111/1467-9310.00088

Affiliations: Chung-Hua Institution for Economic Research, 75 Chang-Hsing St, Taipei, Taiwan

Publication date: April 1, 1998

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