Heterogeneous Tax Sensitivity of Firm-level Investments

Egger, Peter and Erhardt, Katharina and Keuschnigg, Christian (September 2014) Heterogeneous Tax Sensitivity of Firm-level Investments. IHS Economics Series 306, 45 p.

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Abstract or Table of Contents

Firms are heterogeneous in size, productivity, ownership concentration, governance, financial structure and other dimensions. This paper introduces a stylized theoretical framework to account for such differences and to explain the heterogeneous tax sensitivity of firm-level investments across firm types. We econometrically test the theoretical predictions, taking account of selection of firms into different regimes. We find important differences in the tax sensitivity of investment of small entrepreneurial and larger managerial firms in different financial regimes that are largely in line with theoretical results.

Item Type: IHS Series
Keywords: Corporate tax, Personal taxes, Firm heterogeneity, Access to capital, Manager-shareholder conflicts
Classification Codes (e.g. JEL): JEL classification: D22, G32, H25, L21
Status: Published
Date Deposited: 02 Feb 2015 15:20
Last Modified: 22 Jul 2017 05:01
URI: http://irihs.ihs.ac.at/id/eprint/2908

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