We develop an intertemporal firm model that illustrates how dividend taxation interacts with dividend policy and investment efficiency in different stages of a firm's growth process. Our results show that a cut in the dividend tax rate may increase investment efficiency by increasing the return...

I reconsider the effect of capital income taxation on firm size and firm growth by embedding the nucleus theory of firm development of Sinn (1991) into a framework of monopolistic competition with new firm creation. In a turnover of firms, firm destruction is counterbalanced by a permanent...

How do dividend taxes affect firm behavior and what are their distributional and efficiency effects? To answer these questions, the first problem is coming up with an explanation for why firms pay dividends, in spite of their tax penalty.This paper surveys three different models for why firms...

Venture capital has produced an impressive track record in recent years. But the industry is very focused on specific industries and special types of companies. The paper analyses this market separation between bank financed and venture capital backed companies. I find that both venture...

This paper proposes an intertemporal model of venture capital investment with screening and advising where the venture capitalists time endowment is the scarce input factor. Screening improves the selection of firms receiving finance, advising allows firms to develop a marketable product, both...

I reconsider the effect of capital income taxation on firm size and firm growth by embedding the nucleus theory of firm development of Sinn (1991) into a framework of monopolistic competition with new firm creation. In a turnover of firms, firm destruction is counterbalanced by a permanent...