 The cost of capital and investment in developing countriesNo 410, Policy Research Working Paper Series from The World Bank Abstract: The author's model can be used to evaluate how current and new policies affect incentives to invest in a developing country. The model takes into account factors that are often ignored in analyses of investment in more developed countries; such as risk, foreign tax provisions that affect capital flows, trade distortions, lack of domestic capital markets, and the relative credibility of government policy changes. The author reviews the literature on investment and capital costs, showing that the effects of tax and nontax government policies should be incorporated in any analysis of investment behavior. The following questions have been focused on : 1) for each dollar of forgone tax revenues, how much have tax incentives stimulated investment?; 2) do taxes affect foreign investment?; 3) how do taxes affect industrial production?; 4) how have tax instruments affected the use of labor?; 5) how have business taxes and tax expenditures affected technological change?; and 6) are these tax induced distortions preventing firms from holding optimal levels of fixed factors? Keywords: Public Sector Economics&Finance; Banks&Banking Reform; Economic Theory&Research; Environmental Economics&Policies; International Terrorism&Counterterrorism (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:wbk:wbrwps:410 Access Statistics for this paper More papers in Policy Research Working Paper Series from The World Bank 1818 H Street, N.W., Washington, DC 20433. Contact information at EDIRC. |
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