Fiscal Incentives Research Articles

The relationship between financial performance, firm size, leverage, and corporate social responsibility: A case study of Accenture Plc

This study examined the relationship between financial performance, firm size, leverage, and Corporate Social Responsibility (CSR) at Accenture Plc. Using a quantitative correlational research design, the research utilized secondary data from Bloomberg (2014-2023) and analyzed the variables through a multiple regression model. Financial performance (measured by Return on Equity), firm size (total revenue), and leverage (debt-to-assets ratio) were the independent variables, while CSR was measured through Environmental, Social, and Governance (ESG) scores. Findings revealed that firm size had a significant positive relationship with CSR, suggesting that larger firms are more likely to engage in CSR activities. However, there was no statistically significant relationship between Return on Equity (ROE) and leverage with CSR scores. These findings aligned with previous research on the impact of firm size on CSR but differed in terms of ROE and leverage's influence on CSR engagement. The study concluded that Accenture's revenue capacity positively influenced its CSR activities, while leverage and financial performance, as measured by ROE, did not have a significant impact. Recommendations were made for policymakers to consider encouraging larger firms to enhance CSR engagement through fiscal incentives.

Environmental Policies and Tax Incentives in the Pillar Two Era: A Comparison of the EU and US Approaches

This article explores the interaction between global corporate taxes, specifically under the OECD’s Pillar Two, as implemented by the EU Minimum Taxation Directive (2022/2523) in the European Union and by the Corporate Minimum Tax (CAMT) in the United States, and fiscal incentives supporting environmental tax policies under the European Union’s Green Deal and the US Inflation Reduction Act (IRA). The article compares the EU and US approaches and reveals the impact on the investment strategies of MNEs, with a focus on the location of intangibles related to renewable energy technologies, as well as State aid considerations. The article proposes that, instead of marginalizing the green tax credits, they should be reshaped and made subject to a benchmark that supports sustainable innovation within the global tax framework.

Reforming School Choice Systems to Reduce Segregation in Schools: A Comparative Political Economy Study of Education Reform in Belgium, Chile, and the Netherlands

ABSTRACT This study offers a comparative examination of desegregation policy reforms in Belgium, Chile, and the Netherlands, addressing equity reforms to universal school choice systems. Through an analysis of the reform trajectories, we explore the evolution of policies, the causal mechanisms of change, efforts to institutionalize policies, and the sources of resistance to reform. We then undertake a cross-national comparison to discern trends and confirm or disconfirm theorized causes. Policy strategies from each context included nondiscrimination policies, fiscal incentives, and eventually reform of admissions procedures. Causal mechanisms facilitating equity reforms included shifts in political context, grassroots mobilization, generated focusing events through scholarly work and reports of civil society and transnational actors, and effective framing. Oppositional forces from non-state school networks and middle-class/white parents emerged in each context, affecting reform design and the path to institutionalization, but were unable to block reforms. The resulting reforms in each context were the products of compromise that retreated from deeper structural changes, likely mitigating the effects of reforms on school-based segregation.

Comparative assessment of the progress of employee financial participation in the member states of the EU

PurposeThis article provides an overview of the different measures promoting EFP schemes that are in place across the EU-27 and the United Kingdom and classifies Member States according to a “success score” given to each measure. “Success” is measured by the degree to which both soft and hard criteria have contributed to promotion of EFP in different countries.Design/methodology/approachThe article assesses the progress of EFP in EU 27 and the UK using three indicators: (i) legal framework, (ii) fiscal incentives and (iii) political support and social dialogue to obtain an overall score for each country both for ESO and PS. Countries are then grouped into clusters, showing that a significant number of countries have made progress in the spread of both ESO and PS.FindingsESO is much less frequently used in Europe than e.g. in the US. If this still largely unexploited potential is to be harnessed, further development of financial participation, ESO in particular, should be part of an overall European strategy for stimulating sustainable and inclusive growth of the EU economy. A generally favourable attitude in some countries has usually led to supportive legislation for EFP schemes, which, in turn, have led to the spread of these schemes. Tax incentives are important tools for enhancing and broadening financial participation. When properly designed, they promote the spread of EFP effectively.Originality/valueAssessing the progress of EFP schemes in EU 27 and the UK using the three indicators (i) legal framework, (ii) fiscal incentives and (iii) political support and social dialogue, we obtain an overall score for each country both for ESO and PS and compare it with those produced in 2014. We can show that in as many as twelve countries, i.e. 44% of MS, there was a positive change in their overall score between 2014 and 2024.

Towards Net-Zero Emissions from Urban Transport: Ex Post Policy Evaluation in Canberra, the Australian Capital Territory

The achievement of net-zero emissions is a major governmental challenge to ameliorate the adverse impacts of climate change, and to reduce the health risks associated with poor air quality. In Australia, the transport sector is a major contributor to particulate matter and greenhouse gas emissions, especially in urban areas. The Australian Capital Territory (ACT) Government recognises that one of the greatest sustainability challenges to achieving a carbon-neutral society with net-zero emissions is the transport sector because it contributes 60 percent of all emissions under its jurisdiction. The ACT is a suitable case study on climate change, energy policy, and transport emissions because its electricity is powered by renewable energy; its governance has included a continuous planning philosophy of integrating transport with land use. The methodology is based on identifying and summarising the international literature on net-zero emissions policy (n = 50), the relevant policy documents and reports by the Australian Government (n = 8) and by the ACT Government (n = 32). An appraisal of policy outcomes in the ACT is based on an analysis of quantitative and qualitative data. In a car-dependent city (77% of trips by private transport), the most realistic policies for achieving net-zero emissions are to encourage, through fiscal incentives and regulations, the adoption of electric vehicles for buses and private cars, electric or hydrogen vehicles for the commercial fleet, and regulations to phase out petrol- and diesel-powered vehicles.

Governance and policy implications of the Inflation Reduction Act: A European perspective

AbstractThis paper examines the US 2022 Inflation Reduction Act (IRA) alongside the EU's Net‐Zero Industry Act (NZIA) and Critical Raw Materials Act (CRMA) of 2023. We analyze their differential approaches to accelerating investment in clean technology, enhancing energy security and fortifying supply chains. Both regions share the objective of diminishing reliance on Chinese dominance in clean industries. The US seeks to stimulate private investment primarily via uncapped tax credits from 2022 to 2031, some of them subject to stringent domestic content requirements. The EU has reacted to the potential violation of World Trade Organization's rules and a possible green investment shift to the US In doing so, the EU is relying heavily on a regulatory strategy, with emphasis on the simplification of procedures. However, the EU's public funding model is vague and leaves details to the discretion of member states, risking fragmentation within the single market. Through the application of a dynamic computable general equilibrium model, we show that a 50% increase in demand for the IRA's uncapped tax credits could nearly triple US GDP outcomes by 2027. We highlight the contrast between the IRA's immediate fiscal incentives and the NZIA's regulatory approach, emphasising that the former are more attractive for firms.

Tax incentives and environmental performance: The pay-as-you-throw policy in Emilia-Romagna, Italy

This study investigates the impact of implementing the pay-as-you-throw policy as a fiscal incentive mechanism for municipal waste management across municipalities in the Emilia-Romagna region, Italy. Utilizing panel data from 2010 to 2022 and employing a synthetic control with staggered treatment adoption, we evaluate the policy's effects on environmental and local public finance performances. Our findings reveal that treated municipalities witness an average 10% increase in separate waste collection alongside a parallel reduction in municipal waste production since the policy outset, equating to approximately 60 kg per capita annually. Furthermore, our analysis indicates that the policy enables local governments to reduce current energy and environmental expenditures by roughly €130 per capita annually in our optimal model. Notably, results hold robust across three recently developed estimators using difference-in-differences with staggered treatment adoption over time. The policy proves overall effectiveness in promoting circularity within municipal waste management systems, leading to better environmental performances, and decreased environmental management expenses. These implications underscore the potential value for local governments to adopt similar strategies where not yet envisaged.

Local Fiscal Health in Russia: An Achilles’ Heel of Fiscal Federalism?

ABSTRACT This article is the first attempt to systematically study local public finance in contemporary Russia. We document that local governments do not have sufficient own-source revenues, are increasingly more dependent on intergovernmental fiscal aid, lack access to market borrowing, and suffer from structural flaws in the design of intergovernmental fiscal relations. Additionally, we present the results of the modified Brown’s 10-point test to compare local fiscal health across the Russian regions. Finally, we assess the strength of local fiscal incentives in 2012–2021 and demonstrate that local governments in Russia lack capacity to foster local economic growth through the tax code.

Exploring fiscal incentives, financial constraints, and firm innovation performance: A multidimensional correlation analysis and mechanism exploration

The article study selects the panel data of 3407 A-share listed companies between 2010 and 2022, aiming at exploring the impact of fiscal incentives on firms' innovation performance and revealing the mediating role of financing constraints. The empirical results show that fiscal incentives have a significant positive impact on both corporate innovation performance and financing constraints; meanwhile, corporate financing constraints are found to play a fully intermediary role between fiscal incentives and corporate innovation performance. This research result is of great significance to both enterprises and governments. Enterprises can take the initiative to utilize fiscal incentives to improve innovation performance, strengthen financing ability, and then promote enterprise development. The government can take fiscal incentives and other measures to support enterprise innovation and promote the healthy development of the national economy. At the same time, governments should also explore more effective financing mechanisms to provide enterprises with a favorable financing environment to further promote enterprise development and innovation capacity.

Assessment of Colombian renewable energy auctions policy: Enabler or barrier for concentrating solar power plants

Auctions are an alternative for introducing renewable energy (RE) projects into electricity markets at competitive prices. Colombia added 2.2 GW capacity of RE through this mechanism. Nevertheless, 94% of the awarded generation is allocated between 12 a.m. and 5 p.m. because of a lack of low-cost storage. Integrating concentrating solar power plants (CSP) could be relevant in tackling this issue. Therefore, a preliminary step is to determine if Colombian instruments benefit the deployment of CSP and trigger the discussion about its future in the country. In this work, we evaluate how auction mechanisms and fiscal incentives (FI) influence the Levelized Cost of Electricity (LCOE) and Internal Rate of Return (IRR) for two CSP configurations. The results indicate that FIs reduce capital expenditures between 17.11% and 19.45%, reaching similar LCOEs to those reported internationally. However, energy prices higher than USD 150/MWh are required to achieve an adequate IRR. Regarding the auction design, it is observed that a “security criterion” leads to a significant loss of competitiveness for CSP as it neglects its possibility to support demand at night. Policy suggestions are provided for a level playing field where low-cost solutions can coexist with dispatchable renewable power generation.

Energy Transition in Colombia: An Implementation Proposal for SMEs

The environmental summits in Rio de Janeiro, Kyoto, Johannesburg, Bali, Copenhagen, and Paris significantly contributed to raising awareness among nations about the need to reduce greenhouse gas (GHG) emissions. In this context, the energy transition from carbon-based energy sources to renewable energy sources is one of the main goals for both states and companies in the short and medium term. Therefore, the objective of this article is to propose a methodological route for the implementation of energy transition in Colombian SMEs. To achieve this objective, it was necessary to analyze the climate change and energy transition programs included in Colombia’s development plans. The results show that SMEs do not have significant participation in energy transition processes, mainly due to the economic and market barriers they face. However, the fiscal incentives and subsidies established by the government since 2018 increase opportunities for their participation in the present and the coming years.

MCDM Application on Indonesia Halal Food Development Strategy

This study tries to find strategies for the development of the halal food industry in Indonesia with one of the MCDM approaches, namely ANP. Based on the experts' answers, the results show that the biggest weight in the development of halal food in Indonesia is the strategy of strengthening the halal value chain ecosystem (0.33). Next are aspects of strengthening the local market (0.25) and aspects of institutional effectiveness (0.19). Last but not least is the product diversification strategy (0.16). Based on the results of this study, regulators can develop policies that support the establishment of halal centers as part of strengthening the value chain ecosystem. This can be done by providing fiscal incentives, technical assistance, and licensing that facilitate the establishment of halal centers. Then, regulators are expected to further encourage the standardization of domestic halal products by developing policies that facilitate the standardization process, including standard development, certification, and supervision of halal products.

Skimming the achieved? Quantifying the fiscal incentives of the German fiscal equalization scheme and its reforms since 1970

Marginal rates of contribution (MRC), i.e., the rates at which additional revenues are skimmed via larger contributions or lower transfer receipts, quantify the incentives of a fiscal equalization scheme. This paper is the first to calculate marginal rates of contribution for the Laender (states) in the German fiscal equalization scheme for each of the 51 years since its establishment in 1970 and over five major reforms, taking into account all relevant revenues. Our results show that MRC have been at a consistently high level. Until 2019 the scheme induced an almost full skimming of additional tax revenues of recipient states. With the system’s latest reform in 2020, MRC increased further. Recipient states now face an over-skimming of additional tax revenues and, thus, massive fiscal disincentives to maintain their own tax base. While these findings have been widely expected, comprehensive evidence has been missing so far.

A fuzzy approach to environmental scanning (ES) of multi-factor bottlenecks to renewable rural energy sustainability in Nepal

ABSTRACT Due to the prevalence of traditional fuels and the increasing awareness of their negative effects on sustainability, policymakers and government authorities in Nepal have been compelled to transition towards promoting the adoption of clean energy. Nevertheless, as a result of numerous obstacles, the rate of renewable energy utilization has remained sluggish. Therefore, the country’s policymakers must become acquainted with the factors that impede the progress of renewable energy. The objective is to pinpoint the constraints, restrictions, and barriers that hinder the advancement of renewable energy access to rural communities in Nepal. The current study used the Delphi Technique of Environmental Scanning to identify the barriers impeding the adoption of renewable energy. In addition, an Exploratory Factor Analysis (EFA) was performed to redefine categories of bottlenecks depending on the direction of the factors in the context of Nepal. Ultimately, the Fuzzy Analytical Hierarchical Process (FAHP) has been employed to determine the priority of distinct bottlenecks of clean energy development. The study suggests that Nepal’s advancement in sustainable energy is hindered by financial obstacles, primarily due to the significant initial investment, which accounts for 19% of the challenges, and the lack of effective fiscal incentives provided by the government to developers and users, which accounts for 10.6% of the challenges. The research identified many contributory reasons, including the function of regulatory organizations (6.4%), inadequate political commitments (6%), inefficient existing energy policy (5%), and poor public knowledge (5%). To promote the development of sustainable energy sources in rural areas, it is crucial to implement economic incentives, provide financial support, establish partnerships between the public and private sectors, and utilize innovative financing methods such as green bonds, crowdfunding, and carbon financing. Additionally, it is necessary to increase political commitments to amend existing renewable energy policies in the country.

ANALISA DAMPAK PEMBERDAYAAN KELUARGA MISKIN MELALUI BANTUAN SOSIAL TERHADAP KESEJAHTERAAN DI KECAMATAN PAYAKUMBUH SELATAN KOTA PAYAKUMBUH

The purpose of this study was to analyze the strategy and impact of the implementation of community empowerment as well as the effect of social assistance on improving the welfare of poor families in Payakumbuh Selatan Sub-district, Payakumbuh City. Data collection was conducted through semi-structured interviews. Data analysis was carried out using triangulation techniques. The results of the study found that the Regional Apparatus has provided assistance in the form of productive economic business development facilities for the extremely poor and the poor in the data on the Acceleration of Targeting for Extreme Poverty Reduction (P3KE). In addition, the budget was also increased through fiscal incentives to conduct skills training and empower the poor. As a result, the poor in Payakumbuh Selatan Sub-district have received assistance for business capital. For the vulnerable, such as people with disabilities and the elderly, social protection and security assistance are provided, such as the National Health Insurance (JKN), the Family Hope Program (PKH), and rice groceries. There are several factors that hinder the running of the empowerment program, such as inadequate facilities and infrastructure, not yet mapping the potential and abilities of poor families who will be optimally empowered, and the personal mentality of the poor themselves.

Energy transition as a way to improve the welfare of Indonesian society

The shift towards energy is now a priority in Indonesia's efforts to promote sustainable development. With a growing recognition of the effects of climate change and the limitations of energy sources, the urgency to transition to clean and renewable energy options is on the rise. This study aims to investigate how transitioning to energy can enhance the well-being of communities. We aim to highlight critical insights by examining and thoroughly reviewing the literature. Firstly, ensuring energy practices is crucial for attaining development objectives. Energy plays a role in providing services like electricity, transportation, and household heating. Secondly, challenges related to infrastructure and energy accessibility remain hurdles in Indonesia's journey towards an energy transition. Despite advancements in energy initiatives, many remote areas still need access to electricity. Lastly, governmental intervention plays a role in steering a transition towards sustainable energy solutions. Private sector investment in renewable energy sources must be supported and directed through relatively strict policies, fiscal incentives, and regulations. Finally, the energy transition is an essential social and economic event, and appropriate policies need to be developed to promote a just transition and ensure the best outcomes for all stakeholders and society. To conclude, the energy transition in Indonesia requires a combination of government, private sector, civil society, and international stakeholder involvement. By working together across sectors, investing in renewable energy gen technology, and implementing advanced policies, Indonesia promotes transitioning to a more sustainable energy system and improving the overall welfare of society.

Exploring the Influence of Thai Government Policy Perceptions on Electric Vehicle Adoption: A Measurement Model and Empirical Analysis

This study explores the influence of Thai government policy perceptions on the adoption of electric vehicles (EVs). Transitioning to EVs is vital for reducing greenhouse gas emissions and combating climate change, aligning with global sustainability goals. This study addresses gaps in understanding how multidimensional perceptions of government policies influence EV adoption intentions in emerging markets, particularly in Thailand. A questionnaire was distributed to 3770 respondents across Thailand between January and March 2024. The survey assessed multiple dimensions of government policy, including commitment and efficiency, welfare, communication, policy effectiveness, and tax benefits. Using statistical techniques such as Exploratory Factor Analysis (EFA), second-order confirmatory factor analysis (CFA), and structural equation modeling (SEM), this study validated the constructs of government support perception and examined their influence on EV adoption intentions. The findings highlight that tangible government policies, particularly those improving EV infrastructure and providing clear regulatory support, alongside effective communication about these policies, significantly influence public willingness to adopt EVs. The results also emphasize the critical role of perceived government commitment and fiscal incentives in shaping consumer decisions. Based on these insights, this study recommends prioritizing the expansion of EV infrastructure, enhancing the visibility of government commitment, and improving direct financial incentives to accelerate EV adoption. These findings contribute to the growing body of knowledge on EV adoption in emerging markets and offer practical implications for policymakers seeking to promote sustainable transportation solutions.

Renewable energy policy performance and technological innovation in Africa: A Bayesian estimation

This paper examines the effect of renewable energy policy performance on innovation activity in the renewable energy sector in a sample of thirty-three African countries during the period 2010–2021. The policy performance we use covers carbon pricing, incentives for grid-connected and distributed renewable energy generation, fiscal incentives for renewable energy, legal framework for renewable energy, off-take risk, network connection and pricing, and policy design attributes. Using patent data and renewable policy performance to fit a Bayesian negative binomial, our results generally show that renewable energy policy in the region supports technological innovation in the sector. Policy initiatives focused on market-based incentives (auctions and tariffs), renewable portfolio standards, risk mitigation, network connection and pricing are largely responsible for a strong and statistically significant relationship between renewable energy policy and innovation activity. We also find evidence that intellectual property rights, renewable energy capacity, electricity prices, affordability of renewable energy, and openness to trade proxies are important drivers of innovation activity in the renewable energy sector. Our analysis finds no evidence that research and development is a significant determinant of renewable energy innovation in African countries. Our results serve to inform policymakers on the areas in which specific policy actions are most effective at promoting innovation in the renewable energy sector.

Dynamic simulation of policy-driven green technology innovation networks: Digital empowerment and collaborative efficiency

To delve into the intricate dynamics of green innovation, it is imperative to establish a policy-driven green innovation network and optimize its multi-entity collaborative mechanism. Given the dynamic complexity of a technological innovation network composed of multiple entities, this paper examines the interactions among four subsystems based on system dynamics (SD) simulation: resource input, innovation performance, policy-driven, and digital empowerment subsystem. Furthermore, we analyze the combined effects of policy-driven initiatives and the role of digital platforms in facilitating innovation efficiency based on empirical evidence. The results indicate that: (1) Government can effectively promote green development by enforcing stronger environmental regulations, such as increasing carbon trading price, while enhancing the emission reduction efficiency of innovative products. (2) Increased per capita R&D investment, along with financial, tax, fiscal incentives for innovation investment, will increase the rate of innovation achievements. (3) Government should strengthen talent policy during anticipated increases in talent numbers and reduce the intensity of introductions during expected declines. (4) By implementing incentive policies to develop S&T platforms, government can broaden innovation network cooperation, promotes resource aggregation, and leverages multi-entity cohort effects.

The effect of taxation on Moroccan FDI in African countries: an empirical analysis using panel data

ABSTRACT The paper aims to analyse the impact of taxation policies in African countries on Moroccan foreign direct investment (FDI) using panel data from 29 African countries spanning the period 2005–2021, employing the Estimated Generalized Least Squares estimation method. The findings suggest that high total tax, profit tax, and other tax rates deter Moroccan multinational enterprises (MNEs) from investing in African countries. Conversely, fiscal incentives and reduced tax rates positively influence Moroccan FDI in African countries. Additionally, the results indicate that a high score for tax payment and tax rates positively influences Moroccan FDI in African countries, implying that high-quality taxation policies encourage Moroccan MNEs to invest in African economies. Furthermore, the study finds that the GDP of African economies positively moderates the effect of taxation on Moroccan FDI behaviour. This suggests that the larger the market size of a country, the less severe the negative impact of taxation on FDI.