This paper examines the impact of capital gains taxation on firms’ investment and financing decisions. We develop a real options model in which the timing of investment, the decision to default, and the firm’s capital structure are endogenouslyand jointly determined. Our analysis shows that...

In this paper, we propose and test a novel effect of immigration on the wages of native workers. Existing studies have focused on the wage effects that result from changes in the aggregate labour supply in a competitive labour market. We argue that if labour markets are not fully competitive,...

The privatisation policy pursued in the UK by Mrs Thatcher's government (1979-1990) and subsequently by Mr Major's government (1990-1997) was the largest experiment in public divestitures among capitalist economies. It had a deep impact on economic policy-making world wide, and was vastly...

In this paper, we study a firm's optimal lobby behavior and its effect on investment in pollution abatement capital. We develop a dynamic framework where a representative firm can invest in both abatement and lobby capital in response to a possible future increase in pollution tax. We show that...

Policies aimed at reducing emissions from fossil fuels may increase climate damages. This "Green Paradox" emerges if resource owners increase near-term extraction in fear of stricter future policy measures. Hans-Werner Sinn (2008) showed that the paradox occurs when increasing resource taxes are...

Since 1997 the Netherlands has a tax allowance scheme introduced to promote investments in energy saving technologies and sustainable energy production. This Energy Investment Tax Allowance (EIA in Dutch) reduces up-front investment costs for firms investing in the newest energy saving and...

This article studies the effects of tax competition on the provision of public goods under business risk and partial irreversibility of investment. As will be shown, the provision of public goods changes over time and also depends on the business cycle. In particular, under source-based...

Sugary drinks taxes have been implemented around the world and governments around the world are considering extending these taxes to address concerns about rising obesity. We demonstrate the range of impacts a tax on added sugar and salt could have on purchases of food at home and out of the...

Environmental policy affects the distribution of market shares if intermediate goods are differentiated in pollution intensity. When innovations are environmental friendly, a tax on emissions skews demand towards new goods, which are the most productive. In this case along a balanced growth path...

This paper offers a review and discussion of the evidence concerning the underpricing and long run performance of British PIPOs (Privatisation Initial Public Offerings) between 1977-1996, i.e. from the first privatisation under a Labour Government (British Petroleum), until the last ones by a...