Research has documented the stimulating effect of R&D tax credits on R&D expenditure when enacting an R&D tax credit or raising the credit rate. However, the potential adverse effects and consequences of reducing R&D tax incentives remain unexamined. Using a cut in R&D tax incentives in Taiwan,...

The Taiwanese government offers firms that invest in qualified projects in emerging high-tech industries two mutually exclusive tax incentives-a corporate 5-year tax exemption or shareholder investment tax credits. This study examines whether corporate managers take shareholder tax benefits into...