This paper estimates the causal effect of corporate tax hikes on firm investment based on more than 1,400 local tax … changes. By observing planned and realized investment volumes in a representative sample of German manufacturing firms, we can … study how tax hikes induce firms to revise their investment decisions. On average, the share of firms that invest less than …

This paper estimates the causal effect of corporate tax hikes on firm investment based on more than 1,400 local tax … changes. By observing planned and realized investment volumes in a representative sample of German manufacturing firms, we can … study how tax hikes induce firms to revise their investment decisions. On average, the share of firms that invest less than …

Using plant-level data from Chile and the U.S. we show that investment spikes are highly pro-cyclical, so much so that … changes in the number of establishments undergoing investment spikes (the "extensive margin") account for the bulk of … variation in aggregate investment. The number of establishments undergoing investment spikes also has independent predictive …