Taxation and the life cycle of firms

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Show simple item record Erosa, Andrés González López, Beatriz 2022-06-28T12:50:12Z 2022-06-28T12:50:12Z 2019-08-01
dc.identifier.bibliographicCitation Erosa, A., & González, B. (2019). Taxation and the life cycle of firms. Journal of Monetary Economics, 105, pp. 114-130.
dc.identifier.issn 0304-3932
dc.description.abstract The Hopenhayn and Rogerson (1993) framework is extended to understand how different forms of taxing capital income affect firms' investment and financial policies over their life cycle. Relative to dividends and capital gains taxation, corporate income taxation slows down firm growth over the life cycle by reducing after-tax profits available for reinvesting. It also diminishes entry by negatively affecting the value of entrants relative to that of incumbent firms. After a tax reform eliminating the corporate income tax in a revenue neutral way, output and capital increase by 12% and 32%. The large response of firm entry is crucial.
dc.description.sponsorship Erosa acknowledges financial support from the Ministerio de Economia y Competitividad of Spain (grants ECO2015-68615-P and MDM 2014-0431) and Comunidad de Madrid, MadEco-CM (S2015/HUM-3444). Erosa also acknowledges financial support from the Banco de España. González gratefully acknowledges support from Fundación La Caixa (ID 100010434), grant number LCF/BQ/ES15/10360005
dc.language.iso eng
dc.publisher Elsevier
dc.rights © 2019 Elsevier B.V. All rights reserved
dc.rights Atribución-NoComercial-SinDerivadas 3.0 España
dc.subject.other Capital income taxation
dc.subject.other Firm dynamics
dc.subject.other Investment
dc.subject.other Macroeconomics
dc.title Taxation and the life cycle of firms
dc.type article
dc.subject.jel D21
dc.subject.jel E22
dc.subject.jel E62
dc.subject.jel G32
dc.subject.jel H32
dc.subject.eciencia Economía
dc.rights.accessRights openAccess
dc.relation.projectID Comunidad de Madrid. S2015/HUM-3444
dc.relation.projectID Gobierno de España. ECO2015-68615-P
dc.relation.projectID Gobierno de España. MDM 2014-0431
dc.type.version acceptedVersion
dc.identifier.publicationfirstpage 114
dc.identifier.publicationlastpage 130
dc.identifier.publicationtitle JOURNAL OF MONETARY ECONOMICS
dc.identifier.publicationvolume 105
dc.identifier.uxxi AR/0000024754
dc.contributor.funder Ministerio de Economía y Competitividad (España)
dc.contributor.funder Comunidad de Madrid
dc.affiliation.dpto UC3M. Departamento de Economía
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