Manufacturing investment and taxation in the Nordic countries

This paper analyzes the accumulation of fixed productive capital in the manufacturing industries in Denmark, Finland, Norway, and Sweden over the years 1965-1990.Particular attention is given to the effect of taxes on this process.The following conclusions appear fairly robust across countries: Cointegrating long-run relationships can be found within the framework of the neo-classical model.The error-correction estimations indicate that investment is relatively sensitive to economic shocks.Taxes seem not to have had significant effects on long-run capital levels nor on the timing of investment behavior.