Downward Revision of Investment Decisions after Corporate Tax Hikes

Sebastian Link, Manuel Menkhoff, Andreas Peichl and Paul Schüle

American Economic Journal: Economic Policy, 2024, vol. 16, issue 4, 194-222

Abstract: This paper estimates the causal effect of corporate tax hikes on firm investment based on more than 1,400 local tax changes. By observing planned and realized investment volumes in a representative sample of German manufacturing firms, we can study how tax hikes induce firms to revise their investment decisions. On average, the share of firms that invest less than previously planned increases by 3 percentage points after a tax hike. This effect is twice as large during recessions.

JEL-codes: D22 E32 G31 H25 H32 H71 L60 (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://www.aeaweb.org/doi/10.1257/pol.20220530 (application/pdf)
https://doi.org/10.3886/E195121V1 (text/html)
https://www.aeaweb.org/doi/10.1257/pol.20220530.appx (application/pdf)
https://www.aeaweb.org/doi/10.1257/pol.20220530.ds (application/zip)
Access to full text is restricted to AEA members and institutional subscribers.

Related works:
Working Paper: Downward Revision of Investment Decisions after Corporate Tax Hikes (2023)
Working Paper: Downward Revision of Investment Decisions after Corporate Tax Hikes (2022)
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:aea:aejpol:v:16:y:2024:i:4:p:194-222

Ordering information: This journal article can be ordered from
https://www.aeaweb.org/journals/subscriptions

DOI: 10.1257/pol.20220530

Access Statistics for this article

American Economic Journal: Economic Policy is currently edited by Matthew Shapiro

More articles in American Economic Journal: Economic Policy from American Economic Association Contact information at EDIRC.
Bibliographic data for series maintained by Michael P. Albert ().