Incentivos fiscales a la inversión industrial

Abstract

This paper studies the economic effects of tax incentives to industrial activities. First, a simple model allows to demonstrate that these incentives could lead to a poorer allocation of resources by encouraging private firms to undertake projects which have a negative social rate of return. Second, this paper discusses how tax incentives are implemented in practice, evaluating the existence of the principal – agent problem between the department that grants the benefits and the central government. Finally, an empirical analysis is made for the Argentine case.