The paper presents a theoretical model of R&D investment and extensively studies the capitalization policy of development-related costs. It is shown that a firm’s R&D investment policy and capitalizing related costs are influenced by a set of variables such as stock market effects and corporate income tax rates. These results are sharper when spill-over effects are introduced. Interest rates, tax rates, production’s marginal cost, stock market indices and speed of development benefits’ revelation would alter the firm’s disclosure and innovation policies conspicuously.
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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number
172.
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