How does corporate taxation affect business investment?: Evidence from aggregate and firm-level data
Business investment in OECD countries has remained weak, in particular since the 2008 global financial crisis. At the same time, the cost of capital has significantly and steadily decreased over the last thirty years, reflecting a fall in both interest rates and corporate tax rates. This raises the...
Gespeichert in:
| 1. Verfasser: | |
|---|---|
| Weitere Verfasser: | , |
| Format: | Elektronisch E-Book |
| Sprache: | English |
| Veröffentlicht: |
Paris
OECD Publishing
2023
|
| Schriftenreihe: | OECD Economics Department Working Papers
|
| Schlagworte: | |
| Online-Zugang: | Volltext |
| Zusammenfassung: | Business investment in OECD countries has remained weak, in particular since the 2008 global financial crisis. At the same time, the cost of capital has significantly and steadily decreased over the last thirty years, reflecting a fall in both interest rates and corporate tax rates. This raises the question of whether business investment still responds to the cost of capital and thus whether corporate tax policy can support investment. This paper analyses trends in business investment and in the cost of capital in OECD countries over the past three decades. Then, it investigates empirically the sensitivity of business investment to corporate taxation, and how this sensitivity varies across firm, investment and tax-design characteristics. Panel regressions at the firm and industry levels confirm that business investment rates are negatively related to corporate taxation, measured by country-level forward-looking effective tax rates. However, the tax sensitivity of business investment has fallen significantly since the global financial crisis. It also differs significantly across firms, assets, and corporate tax design characteristics. Overall, the estimation results suggest that a nuanced and granular approach to corporate tax policy, accounting for heterogeneity in tax sensitivity, is needed to support investment effectively. The paper discusses possible policy options, including the reduction of non-profit taxes, the use of targeted corporate income tax instruments, and the use of more generous capital allowances where they may induce strong investment responses |
| Beschreibung: | 1 Online-Ressource (61 Seiten) 21 x 28cm |
| DOI: | 10.1787/04e682d7-en |
Internformat
MARC
| LEADER | 00000nam a2200000zc 4500 | ||
|---|---|---|---|
| 001 | BV050074467 | ||
| 003 | DE-604 | ||
| 007 | cr|uuu---uuuuu | ||
| 008 | 241209s2023 xx o|||| 00||| eng d | ||
| 024 | 7 | |a 10.1787/04e682d7-en |2 doi | |
| 035 | |a (ZDB-13-SOC)098549677 | ||
| 035 | |a (DE-599)BVBBV050074467 | ||
| 040 | |a DE-604 |b ger |e rda | ||
| 041 | 0 | |a eng | |
| 049 | |a DE-384 |a DE-91 |a DE-473 |a DE-824 |a DE-29 |a DE-739 |a DE-355 |a DE-20 |a DE-1028 |a DE-1049 |a DE-188 |a DE-521 |a DE-861 |a DE-898 |a DE-92 |a DE-573 | ||
| 100 | 1 | |a Hanappi, Tibor |e Verfasser |4 aut | |
| 245 | 1 | 0 | |a How does corporate taxation affect business investment? |b Evidence from aggregate and firm-level data |c Tibor, Hanappi, Valentine, Millot and Sébastien, Turban |
| 264 | 1 | |a Paris |b OECD Publishing |c 2023 | |
| 300 | |a 1 Online-Ressource (61 Seiten) |c 21 x 28cm | ||
| 336 | |b txt |2 rdacontent | ||
| 337 | |b c |2 rdamedia | ||
| 338 | |b cr |2 rdacarrier | ||
| 490 | 0 | |a OECD Economics Department Working Papers | |
| 520 | |a Business investment in OECD countries has remained weak, in particular since the 2008 global financial crisis. At the same time, the cost of capital has significantly and steadily decreased over the last thirty years, reflecting a fall in both interest rates and corporate tax rates. This raises the question of whether business investment still responds to the cost of capital and thus whether corporate tax policy can support investment. This paper analyses trends in business investment and in the cost of capital in OECD countries over the past three decades. Then, it investigates empirically the sensitivity of business investment to corporate taxation, and how this sensitivity varies across firm, investment and tax-design characteristics. Panel regressions at the firm and industry levels confirm that business investment rates are negatively related to corporate taxation, measured by country-level forward-looking effective tax rates. However, the tax sensitivity of business investment has fallen significantly since the global financial crisis. It also differs significantly across firms, assets, and corporate tax design characteristics. Overall, the estimation results suggest that a nuanced and granular approach to corporate tax policy, accounting for heterogeneity in tax sensitivity, is needed to support investment effectively. The paper discusses possible policy options, including the reduction of non-profit taxes, the use of targeted corporate income tax instruments, and the use of more generous capital allowances where they may induce strong investment responses | ||
| 650 | 4 | |a Taxation | |
| 650 | 4 | |a Economics | |
| 700 | 1 | |a Millot, Valentine |4 ctb | |
| 700 | 1 | |a Turban, Sébastien |4 ctb | |
| 856 | 4 | 0 | |u https://doi.org/10.1787/04e682d7-en |x Verlag |z kostenfrei |3 Volltext |
| 912 | |a ZDB-13-SOC | ||
| 943 | 1 | |a oai:aleph.bib-bvb.de:BVB01-035411829 | |
Datensatz im Suchindex
| _version_ | 1817990476294258688 |
|---|---|
| adam_text | |
| any_adam_object | |
| author | Hanappi, Tibor |
| author2 | Millot, Valentine Turban, Sébastien |
| author2_role | ctb ctb |
| author2_variant | v m vm s t st |
| author_facet | Hanappi, Tibor Millot, Valentine Turban, Sébastien |
| author_role | aut |
| author_sort | Hanappi, Tibor |
| author_variant | t h th |
| building | Verbundindex |
| bvnumber | BV050074467 |
| collection | ZDB-13-SOC |
| ctrlnum | (ZDB-13-SOC)098549677 (DE-599)BVBBV050074467 |
| discipline | Wirtschaftswissenschaften |
| doi_str_mv | 10.1787/04e682d7-en |
| format | Electronic eBook |
| fullrecord | <?xml version="1.0" encoding="UTF-8"?><collection xmlns="http://www.loc.gov/MARC21/slim"><record><leader>00000nam a2200000zc 4500</leader><controlfield tag="001">BV050074467</controlfield><controlfield tag="003">DE-604</controlfield><controlfield tag="007">cr|uuu---uuuuu</controlfield><controlfield tag="008">241209s2023 xx o|||| 00||| eng d</controlfield><datafield tag="024" ind1="7" ind2=" "><subfield code="a">10.1787/04e682d7-en</subfield><subfield code="2">doi</subfield></datafield><datafield tag="035" ind1=" " ind2=" "><subfield code="a">(ZDB-13-SOC)098549677</subfield></datafield><datafield tag="035" ind1=" " ind2=" "><subfield code="a">(DE-599)BVBBV050074467</subfield></datafield><datafield tag="040" ind1=" " ind2=" "><subfield code="a">DE-604</subfield><subfield code="b">ger</subfield><subfield code="e">rda</subfield></datafield><datafield tag="041" ind1="0" ind2=" "><subfield code="a">eng</subfield></datafield><datafield tag="049" ind1=" " ind2=" "><subfield code="a">DE-384</subfield><subfield code="a">DE-91</subfield><subfield code="a">DE-473</subfield><subfield code="a">DE-824</subfield><subfield code="a">DE-29</subfield><subfield code="a">DE-739</subfield><subfield code="a">DE-355</subfield><subfield code="a">DE-20</subfield><subfield code="a">DE-1028</subfield><subfield code="a">DE-1049</subfield><subfield code="a">DE-188</subfield><subfield code="a">DE-521</subfield><subfield code="a">DE-861</subfield><subfield code="a">DE-898</subfield><subfield code="a">DE-92</subfield><subfield code="a">DE-573</subfield></datafield><datafield tag="100" ind1="1" ind2=" "><subfield code="a">Hanappi, Tibor</subfield><subfield code="e">Verfasser</subfield><subfield code="4">aut</subfield></datafield><datafield tag="245" ind1="1" ind2="0"><subfield code="a">How does corporate taxation affect business investment?</subfield><subfield code="b">Evidence from aggregate and firm-level data</subfield><subfield code="c">Tibor, Hanappi, Valentine, Millot and Sébastien, Turban</subfield></datafield><datafield tag="264" ind1=" " ind2="1"><subfield code="a">Paris</subfield><subfield code="b">OECD Publishing</subfield><subfield code="c">2023</subfield></datafield><datafield tag="300" ind1=" " ind2=" "><subfield code="a">1 Online-Ressource (61 Seiten)</subfield><subfield code="c">21 x 28cm</subfield></datafield><datafield tag="336" ind1=" " ind2=" "><subfield code="b">txt</subfield><subfield code="2">rdacontent</subfield></datafield><datafield tag="337" ind1=" " ind2=" "><subfield code="b">c</subfield><subfield code="2">rdamedia</subfield></datafield><datafield tag="338" ind1=" " ind2=" "><subfield code="b">cr</subfield><subfield code="2">rdacarrier</subfield></datafield><datafield tag="490" ind1="0" ind2=" "><subfield code="a">OECD Economics Department Working Papers</subfield></datafield><datafield tag="520" ind1=" " ind2=" "><subfield code="a">Business investment in OECD countries has remained weak, in particular since the 2008 global financial crisis. At the same time, the cost of capital has significantly and steadily decreased over the last thirty years, reflecting a fall in both interest rates and corporate tax rates. This raises the question of whether business investment still responds to the cost of capital and thus whether corporate tax policy can support investment. This paper analyses trends in business investment and in the cost of capital in OECD countries over the past three decades. Then, it investigates empirically the sensitivity of business investment to corporate taxation, and how this sensitivity varies across firm, investment and tax-design characteristics. Panel regressions at the firm and industry levels confirm that business investment rates are negatively related to corporate taxation, measured by country-level forward-looking effective tax rates. However, the tax sensitivity of business investment has fallen significantly since the global financial crisis. It also differs significantly across firms, assets, and corporate tax design characteristics. Overall, the estimation results suggest that a nuanced and granular approach to corporate tax policy, accounting for heterogeneity in tax sensitivity, is needed to support investment effectively. The paper discusses possible policy options, including the reduction of non-profit taxes, the use of targeted corporate income tax instruments, and the use of more generous capital allowances where they may induce strong investment responses</subfield></datafield><datafield tag="650" ind1=" " ind2="4"><subfield code="a">Taxation</subfield></datafield><datafield tag="650" ind1=" " ind2="4"><subfield code="a">Economics</subfield></datafield><datafield tag="700" ind1="1" ind2=" "><subfield code="a">Millot, Valentine</subfield><subfield code="4">ctb</subfield></datafield><datafield tag="700" ind1="1" ind2=" "><subfield code="a">Turban, Sébastien</subfield><subfield code="4">ctb</subfield></datafield><datafield tag="856" ind1="4" ind2="0"><subfield code="u">https://doi.org/10.1787/04e682d7-en</subfield><subfield code="x">Verlag</subfield><subfield code="z">kostenfrei</subfield><subfield code="3">Volltext</subfield></datafield><datafield tag="912" ind1=" " ind2=" "><subfield code="a">ZDB-13-SOC</subfield></datafield><datafield tag="943" ind1="1" ind2=" "><subfield code="a">oai:aleph.bib-bvb.de:BVB01-035411829</subfield></datafield></record></collection> |
| id | DE-604.BV050074467 |
| illustrated | Not Illustrated |
| indexdate | 2024-12-09T19:00:24Z |
| institution | BVB |
| language | English |
| oai_aleph_id | oai:aleph.bib-bvb.de:BVB01-035411829 |
| open_access_boolean | 1 |
| owner | DE-384 DE-91 DE-BY-TUM DE-473 DE-BY-UBG DE-824 DE-29 DE-739 DE-355 DE-BY-UBR DE-20 DE-1028 DE-1049 DE-188 DE-521 DE-861 DE-898 DE-BY-UBR DE-92 DE-573 |
| owner_facet | DE-384 DE-91 DE-BY-TUM DE-473 DE-BY-UBG DE-824 DE-29 DE-739 DE-355 DE-BY-UBR DE-20 DE-1028 DE-1049 DE-188 DE-521 DE-861 DE-898 DE-BY-UBR DE-92 DE-573 |
| physical | 1 Online-Ressource (61 Seiten) 21 x 28cm |
| psigel | ZDB-13-SOC |
| publishDate | 2023 |
| publishDateSearch | 2023 |
| publishDateSort | 2023 |
| publisher | OECD Publishing |
| record_format | marc |
| series2 | OECD Economics Department Working Papers |
| spelling | Hanappi, Tibor Verfasser aut How does corporate taxation affect business investment? Evidence from aggregate and firm-level data Tibor, Hanappi, Valentine, Millot and Sébastien, Turban Paris OECD Publishing 2023 1 Online-Ressource (61 Seiten) 21 x 28cm txt rdacontent c rdamedia cr rdacarrier OECD Economics Department Working Papers Business investment in OECD countries has remained weak, in particular since the 2008 global financial crisis. At the same time, the cost of capital has significantly and steadily decreased over the last thirty years, reflecting a fall in both interest rates and corporate tax rates. This raises the question of whether business investment still responds to the cost of capital and thus whether corporate tax policy can support investment. This paper analyses trends in business investment and in the cost of capital in OECD countries over the past three decades. Then, it investigates empirically the sensitivity of business investment to corporate taxation, and how this sensitivity varies across firm, investment and tax-design characteristics. Panel regressions at the firm and industry levels confirm that business investment rates are negatively related to corporate taxation, measured by country-level forward-looking effective tax rates. However, the tax sensitivity of business investment has fallen significantly since the global financial crisis. It also differs significantly across firms, assets, and corporate tax design characteristics. Overall, the estimation results suggest that a nuanced and granular approach to corporate tax policy, accounting for heterogeneity in tax sensitivity, is needed to support investment effectively. The paper discusses possible policy options, including the reduction of non-profit taxes, the use of targeted corporate income tax instruments, and the use of more generous capital allowances where they may induce strong investment responses Taxation Economics Millot, Valentine ctb Turban, Sébastien ctb https://doi.org/10.1787/04e682d7-en Verlag kostenfrei Volltext |
| spellingShingle | Hanappi, Tibor How does corporate taxation affect business investment? Evidence from aggregate and firm-level data Taxation Economics |
| title | How does corporate taxation affect business investment? Evidence from aggregate and firm-level data |
| title_auth | How does corporate taxation affect business investment? Evidence from aggregate and firm-level data |
| title_exact_search | How does corporate taxation affect business investment? Evidence from aggregate and firm-level data |
| title_full | How does corporate taxation affect business investment? Evidence from aggregate and firm-level data Tibor, Hanappi, Valentine, Millot and Sébastien, Turban |
| title_fullStr | How does corporate taxation affect business investment? Evidence from aggregate and firm-level data Tibor, Hanappi, Valentine, Millot and Sébastien, Turban |
| title_full_unstemmed | How does corporate taxation affect business investment? Evidence from aggregate and firm-level data Tibor, Hanappi, Valentine, Millot and Sébastien, Turban |
| title_short | How does corporate taxation affect business investment? |
| title_sort | how does corporate taxation affect business investment evidence from aggregate and firm level data |
| title_sub | Evidence from aggregate and firm-level data |
| topic | Taxation Economics |
| topic_facet | Taxation Economics |
| url | https://doi.org/10.1787/04e682d7-en |
| work_keys_str_mv | AT hanappitibor howdoescorporatetaxationaffectbusinessinvestmentevidencefromaggregateandfirmleveldata AT millotvalentine howdoescorporatetaxationaffectbusinessinvestmentevidencefromaggregateandfirmleveldata AT turbansebastien howdoescorporatetaxationaffectbusinessinvestmentevidencefromaggregateandfirmleveldata |