Dividend Taxes and the Allocation of Capital: Comment

Laurent Bach, Antoine Bozio, Arthur Guillouzouic () and Clément Malgouyres
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Arthur Guillouzouic: PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement

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Abstract: Boissel and Matray (2022) find that investment increased after 2013 in French firms facing higher dividend taxes. We identify an alteration in the code plotting the event study of the effect of this reform on investment. Using identical data and removing this alteration, we find differential pre-trends between treated and control firms. We also establish that the controls referred to as "size growth," used in all the difference-in-difference specifications, effectively are controls for lagged investment, i.e., the main outcome variable. Removing such controls attenuates differential pre-trends but leaves no clear event study evidence of a positive effect of dividend taxation on investment.

Date: 2023-07
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Published in American Economic Review, 2023, 113 (7), pp.2048-2052. ⟨10.1257/aer.20221432⟩

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Journal Article: Dividend Taxes and the Allocation of Capital: Comment (2023)
Working Paper: Dividend Taxes and the Allocation of Capital: Comment (2023)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:pseptp:halshs-04346639

DOI: 10.1257/aer.20221432

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