Fiscal Measures and Corporate Investment in France

Jean-Charles Bricongne, Lucia Granelli and Susanne Hoffmann

No 68, European Economy - Discussion Papers from Directorate General Economic and Financial Affairs (DG ECFIN), European Commission

Abstract: The purpose of this paper is to assess the effect of fiscal measures on the investment decisions of French non-financial corporations. As a reference framework, we use the model developed by Eudeline et al. (2013). We extend this framework by introducing the effect of fiscal incentives on investments. We estimate the effect of a decrease in the corporate tax rate in France, which passed from 42 % in 1990 to 33.3 % nowadays and is planned to be reduced to 28 % by 2020 and to 25% in 2022. Fiscal measures are found to have a positive effect on investment, although the growth rate of economic activity and the corporate saving rate remain the main drivers of corporate investment.

JEL-codes: C22 E22 E62 (search for similar items in EconPapers)
Pages: 28 pages
Date: 2017-07
New Economics Papers: this item is included in nep-acc, nep-eur and nep-mac
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:euf:dispap:068

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