Dynamic Investment and Financing under Personal Taxation

Détails

ID Serval
serval:BIB_D94187D4CA04
Type
Article: article d'un périodique ou d'un magazine.
Collection
Publications
Institution
Titre
Dynamic Investment and Financing under Personal Taxation
Périodique
Review of Financial Studies
Auteur(s)
Morellec  E., Schuerhoff  N.
ISSN
0893-9454
Statut éditorial
Publié
Date de publication
01/2010
Peer-reviewed
Oui
Volume
23
Numéro
1
Pages
101-146
Langue
anglais
Résumé
In this paper we examine the effects of capital gains taxation on firms' investment and financing decisions. We develop a real-options model in which the timing of investment, the decision to default, and the firm's capital structure are endogenously and jointly determined. Our analysis demonstrates that the asymmetric taxation of capital gains and losses fosters investment by eroding the option value of waiting. It also shows that firms controlled by taxable investors employ more equity financing, the higher the firm's stock price and the worse the firm's historical performance. Using a large sample of U.S. industrial firms that are owned by taxable investors between 1970 and 2008, we present new evidence on corporate investment and financing policies, which is supportive of the model's predictions.
Mots-clé
G31, G32, H24, H32
Web of science
Création de la notice
31/05/2010 15:19
Dernière modification de la notice
21/08/2019 5:13
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