We use firm-level panel data to explore the extent to which fixed investment responds to tax reforms in 14 OECD … countries. Previous studies have often found that investment does not respond to changes in the marginal cost of investment. We … of them. In so doing, we find evidence of statistically and economically significant investment responses to tax changes …

research that uses cross-sectional differences in firm behavior to test for financing constraints on investment. This reply … of internal finance. Second, the KZ regression results (lower sensitivity of investment to cash flow for firms classified …

In this paper, we summarize recent advances in the study of effects of tax policy on the fixed investment decisions of … long-run tax policy that favors business investment spending …

Recent theoretical approaches have linked shifts in firms' internal funds and investment spending, holding constant … underlying investment opportunities. An important impediment to convincing tests of these models is the lack of firm-level data …) in the 1930s, to identify firms' relative cost of internal and external funds and analyze its effect on firms' investment …