EconPapers    
Economics at your fingertips  
 

Heterogeneous Tax Sensitivity of Firm-level Investments

Christian Keuschnigg, Peter Egger and ,
Authors registered in the RePEc Author Service: Katharina Erhardt ()

No 13341, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: This paper introduces a stylized theoretical framework to identify five different firm types depending on their financial situation and their ownership structure. Based on these firm types, the model explains the heterogeneous tax sensitivity of firm-level investments. Guided by the theoretical model, we empirically identify these partly latent firm types using a threshold estimation approach. The empirical analysis uses a large firm database for 17 countries allowing for a quantification of the regime-specific investment responses to taxation. We find important differences in the tax sensitivity of investment across firm-types for dividend as well as for corporate taxation. The impact of corporate taxation is up to 70% higher for entrepreneurial firms than for managerial firms. In contrast, dividend taxation has a comparable negative effect for cash-constrained managerial firms and entrepreneurial firms but no significant impact on their unconstrained counterparts.

Keywords: Corporate tax; Personal taxes; Firm heterogeneity; Access to capital; Manager-shareholder conflicts (search for similar items in EconPapers)
JEL-codes: D22 G32 H25 L21 (search for similar items in EconPapers)
Date: 2018-11
New Economics Papers: this item is included in nep-acc, nep-bec, nep-cfn and nep-pbe
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
https://cepr.org/publications/DP13341 (application/pdf)
CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org

Related works:
Journal Article: Heterogeneous tax sensitivity of firm-level investments (2020) Downloads
Working Paper: Heterogeneous Tax Sensitivity of Firm-level Investments (2014) Downloads
Working Paper: Heterogeneous Tax Sensitivity of Firm-level Investments (2014) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cpr:ceprdp:13341

Ordering information: This working paper can be ordered from
https://cepr.org/publications/DP13341

Access Statistics for this paper

More papers in CEPR Discussion Papers from C.E.P.R. Discussion Papers Centre for Economic Policy Research, 33 Great Sutton Street, London EC1V 0DX.
Bibliographic data for series maintained by ().

 
Page updated 2025-03-23
Handle: RePEc:cpr:ceprdp:13341