investment incentivea financial inducement given by the government to a firm as a means of encouraging new INVESTMENT. Such inducements can include cash grants to defray part of the costs of building a new factory and/or installing new machines and equipment; low interest rates; interest-free LOANS; or tax relief on the firm's profits. Investment incentives can be used to stimulate investment in general, or they can be targeted to encourage certain types of investment and to influence the geographical location of new investment. See CAPITAL ALLOWANCE, INDUSTRIAL POLICY, REGIONAL POLICY, SUBSIDY, ENTERPRISE INVESTMENT SCHEME, ENTERPRISE GRANT SCHEME.
Collins Dictionary of Business, 3rd ed. © 2002, 2005 C Pass, B Lowes, A Pendleton, L Chadwick, D O’Reilly and M Afferson