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Optimal debt bias in corporate income taxation

Simon, Jenny - 2015

I present a rationale for a government to discriminate between debt and equity financing when taxing corporate income. For risk-averse entrepreneurs, equity generates more surplus than debt, because it provides financing and insurance. A government seeking to extract surplus from entrepreneurs...

Persistent link: https://www.econbiz.de/10011350162

Corporate debt and stock returns : evidence from U.S. firms during the 2020 oil crash

Arezki, Rabah; Cho, Caleb; Nguyen, Ha; Nguyen, Kate; … - 2022

This paper explores the effect of oil price fluctuations on the stock returns of U.S. oil firms using a strategy of identification through heteroskedasticity exploiting the 2020 oil crash. Results are twofold. First, we find that a decline in oil prices statistically significantly reduces stock...

Persistent link: https://www.econbiz.de/10013205096

Curbing corporate debt bias : do limitations to interest deductibility work?

Mooij, Ruud A. de; Hebous, Shafik - 2017

Tax provisions favoring corporate debt over equity finance ("debt bias") are widely recognized as a risk to financial stability. This paper explores whether and how thin-capitalization rules, which restrict interest deductibility beyond a certain amount, affect corporate debt ratios and mitigate...

Persistent link: https://www.econbiz.de/10011597274

Does debt maturity matter for investment decisions?

Nam, Chang-woon; Radulescu, Doina - 2004

In the conventional literature related to investment decisions, less attention has been paid to the length of maturity … cost at the end of the borrowing period. In this study, the effects of selecting different maturity years on firms … suggest that (1) ceteris paribus an optimum maturity year appears to exist that maximises the NVP, and (2) the change of …

Persistent link: https://www.econbiz.de/10011402695

Manufacturing risk-free government debt

Jiang, Zhengyang; Lustig, Hanno; Nieuwerburgh, Stijn van; … - 2021

Governments face a trade-off between insuring bondholders and taxpayers. If the government fully insures bondholders by manufacturing risk-free zero-beta debt, then it cannot also insure taxpayers against permanent macroeconomic shocks over long horizons. Instead, taxpayers will pay more in...

Persistent link: https://www.econbiz.de/10012437854

Rumors and runs in opaque markets : evidence from the panic of 1907

Fohlin, Caroline; Gehrig, Thomas P.; Haas, Marlene - 2016

rose most in the mining sector - the origin of the stock corner and a sector with among the worst track records of …

Persistent link: https://www.econbiz.de/10011522131

Wage posting as a positive selection device : theory and empirical evidence

Gartner, Hermann; Holzner, Christian - 2015

We use the German Job Vacancy Survey to investigate whether firms are able to attract more suitable applicants by offering bargain wages rather than posting fixed wages. Contrary to the theoretical predictions provided by the literature, we find that the offer to bargain over pay decreases the...

Persistent link: https://www.econbiz.de/10011310001

Efficiency, welfare, and political competition

Bierbrauer, Felix; Boyer, Pierre C. - 2014

We study political competition in an environment in which voters have private information about their preferences. Our framework covers models of income taxation, public-goods provision or publicly provided private goods. Politicians are vote-share-maximizers. They can propose any policy that is...

Persistent link: https://www.econbiz.de/10010358277

To commit or not to commit? : an experimental investigation of pre-commitments in bargaining situations with asymmetric information

Hoffmann, Sönke; Mihm, Benedikt; Weimann, Joachim - 2014

In a recent paper Konrad and Thum (2014) present a model that shows that unilateral pre-commitment reduces the likelihood of agreement in bilateral negotiations over the provision of a public good when parties have private information over their contribution costs. We test the model in a...

Persistent link: https://www.econbiz.de/10010361371

Income tax buyouts and income tax evasion

Goerke, Laszlo - 2014

A tax buyout is a contract between tax authorities and a tax payer which reduces the marginal income tax rate in exchange for a lump-sum payment. While previous contributions have focussed on labour supply, we consider the interaction with tax evasion and show that a buyout can increase expected...

Persistent link: https://www.econbiz.de/10010237195

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