A mixed methods approach to studying asset replacement decisions

Research on taxation policy has traditionally been undertaken using quantitative methods, although it is increasingly obvious that such work cannot take place in a contextual vacuum. The use of taxation policy to encourage innovation in the Australian rail freight industry was assessed via a quantitative model, but the results were contrasted with interview data gleaned from industry decision makers. While the quantitative model predicted that acceleration depreciation schedules would encourage innovation, a variety of contextual and institutional factors, as indicated by industry decision makers, were found to limit investment. Finally, a focus group was used to test the validity of both aspects of the research. The study represents a case in point for using a mixed methods approach in finance research.