THE IMPACT OF RESEARCH-AND-DEVELOPMENT PROMOTION SCHEMES IN THE TAIWANESE ELECTRONIC-COMPONENT INDUSTRY

This paper explores the effect of government research and development (R&D) promotion schemes on R&D expenditures in the electronic componen t industry. We investigated the impact of three promotion tools: R&D t ax credits, exemption from tariffs, and accelerated depreciation. A to tal of 124 firms was interviewed, A two-limit model was used in the da ta analysis. Our empirical analysis indicates the scheme generated a r ate of increase in industrial R&D investments of about 16%, Furthermor e, on average, the impacts of R&D tax credits, exemption from tariffs, and accelerated depreciation, were about 10%, 4%, and 2%, respectivel y. In addition, we found that the larger the firm, the weaker the infl uence of the promotion scheme on R&D expenditures in the industry.