RT Journal Article
T1 Taxation and the life cycle of firms
A1 Erosa, Andrés
A1 González López, Beatriz
AB 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.
PB Elsevier
SN 0304-3932
YR 2019
FD 2019-08-01
LK https://hdl.handle.net/10016/35313
UL https://hdl.handle.net/10016/35313
LA eng
NO Erosa acknowledges financial support from the Ministerio de Economia y Competitividad ofSpain (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
DS e-Archivo
RD 11 sept. 2024