Capturing the effects of capital subsidies |
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| Authors: | David Lim |
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| Affiliation: | Faculty of Asian and International Studies , Griffith University , Brisbane, Australia |
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| Abstract: | Most developing countries provide fiscal incentives to encourage domestic and foreign investment. This study shows that these schemes subsidise significantly the use of capital and produce greater capital intensity in Malaysian manufacturing. These results were obtained by conducting the analysis at the establishment level, which avoids the artificial aggregation of establishments with different production structures into an industry‐group and having to choose an appropriate weighting system in the aggregation process. |
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