Government Tax Incentives and Fixed Asset Acquisitions: A Comparative Study of Four Industrial Countries.

The use of tax and nontax government incentives to stimulate business investment in fixed assets is commonplace. Most of these incentives are supply-side measures. This article presents the results of a study designed to determine the efficacy of such provisions. The four industrialized countries examined in this study were selected because of the similarities in their economic objectives and because of the variety of their incentive provisions. The results clearly indicate that none of these different measures and techniques significantly impact decision making involving fixed assets. Implications of the findings also are presented.