We examine government decisions on subsidizing investments in the private sector and discriminating among firms in its support programs. By taxing corporate profits, the government may affect corporate investment decisions, causing firms to invest less than what would be socially optimal. Investments that are desirable from the standpoint of social welfare may be rejected by shareholders, which may ultimately lead to the collection of fewer taxes. We analyze the conditions for optimal subsidies for investments carried out by the private sector. We find that high-risk ventures that generate substantial spillover activity are prime candidates for government incentive schemes.
Download Info
To our knowledge, this item is not available for
download. To find whether it is available, there are three
options:
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page
whether it is in fact available.
3. Perform a search for a similarly titled item that would be
available.
Publisher Info
Article provided by Financial Management Association in its journal Financial Management.
Contact details of provider: Postal: University of South Florida 4202 E. Fowler Ave. COBA #3331 Tampa, FL 33620 Phone: 813-974-2084 Fax: 813-974-3318 Web page: http://www.fma.org/ More information through EDIRC
For technical questions regarding this item, or to correct its listing, contact: (Courtney Connors).