The elasticity of business capital to changes in its user cost is central to the economic analysis of fiscal policies. As a major component, the user cost of capital includes a firm's marginal tax rate. Due to the asymmetric treatment of tax losses and profits, the marginal tax rate can depart...

I analyze the e ffects of profi t taxation on the fi nancing decision of corporate acquisitions. The deductibility of interest expenses from the corporate tax base creates an incentive for acquiring companies to fi nance a takeover with debt. Regarding the particular decision how to finance the...

This paper sets up an imperfect-competition model of a small open economy, and undertakes a welfare comparison of the Corporate Business Income Tax (CBIT) and the Allowance for Corporate Equity tax (ACE). A main result is that a small open economy should levy a positive source tax on capital in...

The objective of this paper is to look into the probability that, given the choice, corporate groups would opt for taxation on a consolidated basis. Consolidation would allow them to offset losses crossborder but remove the opportunity to exploit international tax-rate differentials between...

We analyze the impact of partial public ownership (PPO) on managerial incentives. A novelty of the paper is that it explicitly considers competition in the product market. We find that PPO negatively affects managerial incentives when all firms are partially owned by the government. When...

The empirical investment literature provides evidence on financing constraints mostly by estimating cash-flow sensitivities for a priori (un-)constrained firms or develops rather ad-hoc indicators to explain firms' differential access to external capital. However, the sources and determinants of...

Multinational companies can exploit the tax advantage of debt more aggressively than national companies. Besides utilizing the standard debt tax shield, multinationals can shift debt from affiliates in low-tax countries to affiliates in high-tax countries. We study the capital structure of...

This paper analyzes revenue and welfare effects of implementing a FAT both from a theoretical and a quantitative perspective. The theoretical analysis allows us to derive expressions for the revenue effects and the deadweight loss in a general equilibrium setting, which can be quantified with a...

Die vorliegende Studie möchte einen Beitrag zur Analyse der Wirkung öffentlicher Wirtschaftsförderung leisten. Mit Daten des IAB-Betriebspanels der Jahre 1996 bis 2009 wird die der Einfluss staatlicher Unterstützung auf verschiedene Indikatoren, die einen Einblick in die betriebliche...