Tax‐Adjusted q Model with Intangible Assets: Theory and Evidence from Temporary Investment Tax Incentives

Sophia Chen () and Estelle P. Dauchy

Southern Economic Journal, 2017, vol. 83, issue 4, 972-992

Abstract: We propose a tax‐adjusted q model with physical and intangible assets and estimate the effect of bonus depreciation in the United States in the early 2000s. We find that investment responds moderately to tax incentives, but allowing for heterogeneity reveals that intangible‐intensive firms respond more than physical‐intensive firms and that this difference is accentuated among large firms. Accounting for intangible assets increases the estimated total investment response from 3.7 to 14.3% of aggregate investment in 2000 among the largest 500 firms. Our results suggest that understanding the behavior of large and intangible‐intensive firms matters for investment policy.

Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://doi.org/10.1002/soej.12203

Related works:
Working Paper: Tax-adjusted Q Model with Intangible Assets: Theory and Evidence from Temporary Investment Tax Incentives (2014)
Working Paper: Tax-adjusted Q Model with Intangible Assets: Theory and Evidence from Temporary Investment Tax Incentives (2014)
Working Paper: The Tax-adjusted Q Model with Intangible Assets: Theory and Evidence from Temporary Investment Tax Incentives (2014)
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:wly:soecon:v:83:y:2017:i:4:p:972-992

Access Statistics for this article

More articles in Southern Economic Journal from John Wiley & Sons
Bibliographic data for series maintained by Wiley Content Delivery ().