Xu, Qiping; Zwick, Eric - 2022
This paper documents tax-minimizing investment, in which firms tilt capital purchases toward fiscal year-end to reduce … taxes. Between 1984 and 2013, average investment in fiscal Q4 exceeds the average of fiscal Q1 through Q3 by 37%. Q4 spikes … waiting until fiscal year-end. We develop an investment model with tax asymmetries to rationalize these patterns. Models …