FINANCIAL INCENTIVES TO ENHANCE CAPITAL INVESTMENTS IN THE EMERGING MARKET ECONOMY OF SOUTH AFRICA

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Abstract

Governments often provide financial incentives to enhance capital investments, as capital is one of the four main production factors in the business environment. Financial incentives may attract capital investments, which should increase economic development and job opportunities in the long run. The objective of this research embodies the improvement of financial decision-making with reference to financial incentives to enhance capital investments in emerging market economies. While there are a variety of financial incentives which can be applied, this research paper concentrates on the well-known financial incentives, viz. the wear and tear allowances, the initial and investment allowances, the investment tax credits, cash grants, as well as tax havens and tax holidays. South Africa is a developing country and is classified as one of the 21 emerging market economies of the world. As the empirical study focuses on the top listed South African companies, the conclusions of this study may also be valuable to other countries with emerging market economies, where the enhancement of investments is one of the key attributes.

Keywords: Accelerated Depreciation, Cash Grants, Initial Allowances, Investment Allowances, Investment Tax Credits, Tax Havens, Tax Holidays, Wear And Tear Allowances

How to cite this paper: Cardoso, S. G., Mostert, F. J., & Mostert, J. H. (2011). Financial incentives to enhance capital investments in the emerging market economy of South Africa. Corporate Ownership & Control, 8(3-2), 290-296. https://doi.org/10.22495/cocv8i3c2p5