A recent report published from the Office of the Chief Economist has found that government assistance (such as that available from the R&D Tax Incentive) has a positive impact on a company’s ability to generate external finance.
The report referenced previous papers investigating the effectiveness of R&D Tax Incentives which found substantial evidence that receiving R&D tax subsidies improve the likelihood and amount of external financing available to a firm, especially when the firm is small and high-tech (Lerner, 1999; Feldman & Kelley, 2006; Takalo & Tanayama, 2010; Meuleman & De Maeseneire, 2012).
Notable extracts from the recent report from the Office of the Chief Economist include the following :
The report also detailed findings from the author that AusIndustry personnel had advised that investors and banks have a preference for tax concessions over grants given that: