TAXATION, COST OF CAPITAL AND INVESTMENT IN AUSTRALIAN AGRICULTURE

Philip E.T. Lewis, Nigel H. Hall, C.R. Savage and A.G. Kingston

Australian Journal of Agricultural Economics, 1988, vol. 32, issue 01, 7

Abstract: The concept and measurement of the cost of capital is developed to include particularly the role of taxation in investment behaviour. The relative importance of factors influencing investment in plant and machinery is examined for five sectors which make up the broadacre industry of Australia. It is shown that residual funds are important in determining plant and machinery investment, but not through the normally hypothesised channels. It is not the increased liquidity from increased income which raises investment, but the fall in the cost of capital, which is associated with the marginal rate of tax.

Keywords: Public; Economics (search for similar items in EconPapers)
Date: 1988
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:ags:ajaeau:22919

DOI: 10.22004/ag.econ.22919

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