I examine whether and to what extent tax uncertainty affects a firm's dividend payouts. Based on the argument that tax uncertainty impairs the persistence and predictability of after-tax cash flows, I hypothesize and find that firms with greater tax uncertainty exhibit a lower probability of...

This note provides an explanation for why tax rates on capital gains are usually lower than ordinary income tax rates based on manager's agency problem related to "empire-building" and the underinvestment problem

This note provides an explanation for why tax rates on capital gains are usually lower than ordinary income tax rates based on manager's agency problem related to "empire-building" and the underinvestment problem

Chatty and Saez (2004) argued that more Principal-Agent models explaining firm dividend policy are expected and subsequently offered a model of dividend policy that includes a tax on dividends and agency problems (Chatty and Saez (2007)). In this paper we extent their model by adding a tax on...

This paper develops a dynamic general equilibrium model to assess the effects oftemporary business tax cuts. First, the analysis extends the Ricardian equivalence result toan environment with production and establishes that a temporary tax cut financed by afuture tax-increase has no real effect...

Free Cash Flow (FCF) was adopted in the late 1980s as a financial tool to evaluate the firm and its individual projects. We question the procedure of calculating the FCF where a significant portion of Current Liabilities is offset against Current Assets, thereby creating the hybrid asset Net...

Reinvested earnings represent an important component of foreign direct investment, and the managerial and policy implications of affiliate reinvestment have been neglected in the international business literature, although they have received attention in the economic literature on taxation. This...

This paper investigates whether investor-level taxes affect corporate payout policy decisions. We predict and find a surge of special dividends in the final months of 2010 and 2012, immediately before individual-level dividend tax rates were expected to increase. We also find evidence that...

In this paper, the reaction of firms to the introduction of environmental charges in a given industry is analysed. Firms may decide either to relocate their plants abroad or to adopt a new environmental-friendly technology. The latter can be either developed by investing in R&D or obtained by...

In a dynamic model of a risk-neutral competitive firm which can lower its pollution emissions per unit of output by building up abatement capital stock, we examine the effect of a higher pollution tax rate on abatement investment both under full certainty and when the timing or the size of the...