The Impact of The Tax Mechanism on Sectoral Development: Theoretical Approaches

This article systematizes the principal theoretical approaches to understanding the impact of the tax mechanism on the development of economic sectors. Classical, Keynesian, supply-side, endogenous growth, and institutional theories are examined comparatively, together with contemporary international empirical studies on tax incentives, tax competition, and R&D-related tax relief. The analysis identifies three principal channels through which the tax mechanism affects sectoral development: the cost-of-capital channel, the financing-constraints channel, and the resource-reallocation channel. The findings demonstrate that the effects of tax incentives are nonlinear and depend on sector-specific characteristics, incentive design, and the quality of the institutional environment. Based on the results, the study proposes a three-level framework for evaluating the effectiveness of tax incentives, encompassing resource inputs, innovation outcomes, and economic performance indicators. The proposed framework makes it possible to distinguish between nominal increases in innovative activity and genuine technological and economic development at the sectoral level.