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on Corporate Finance |
| By: | Köthenbürger, Marko; Stimmelmayr, Michael |
| Abstract: | The paper analyzes the efficiency costs of dividend taxation in an effort-based corporate agency model in which non-verifiable managerial effort enhances taxable profits. We show that investment changes following a rise in dividend taxes might not be sufficient to infer the efficiency cost of dividend taxation as well as the financing regime of the firm that underlies the investment response, in contrast to insights from previous literature. We provide a testable implication to infer the mode of investment finance from investment responses. Furthermore, we show that imposing income tax on managerial incentive pay is welfare equivalent to a general dividend tax. Finally, we relate the results to recent empirical findings in the literature on dividend taxation. |
| JEL: | H21 D21 D61 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc16:145649&r=cfn |
| By: | Holtemöller, Oliver |
| Abstract: | In this paper, we employ firm-level data to analyze to what extent financing conditions of non-financial corporations in the Euro Area depend on country-specific factors, in particular the respective country's government bond yield and the share of non-performing loans to the corporate sector. Moreover, we assess whether this relationship has changed during the European debt crisis. It turns out that the increase in corporate financing costs during the year 2011 can partially be explained by increasing government bond yields. However, the further increase of corporate financing costs in stressed Euro area countries during the year 2012 can not be explained by these yields, but by the share of non-performing loans. This finding suggests that the ECB's policy of reducing corporate financing costs in stressed countries via government bond purchases may not be effective. |
| JEL: | E43 E44 E52 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc16:145820&r=cfn |
| By: | Guzman Ourens (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES) and FNRS) |
| Abstract: | After the emergence and development of heterogeneous firm trade models, some (most notably Arkolakis, Costinot and Rodriguez-Clare 2012, ACR) have argue that a family of these models (e.g. a Melitz-type model with Pareto distributed firms) do not add to the evaluation of welfare effects of freer trade. In this paper we expand that model in two directions: we introduce a very simple growth mechanism and we allow for asymmetric countries. Introducing simple dynamics in the heterogeneous firm model adds new static and dynamic effects to the well-known decrease in prices that increases welfare in the static model. The constant level of nominal expenditure is affected as firm selection changes the average value of firms which modifies consumers' resource constraint. The growth rate of real consumption is also affected by firm selection since greater average efficiency means a larger amount of resources are required to create a new variety. Country asymmetry yields differentiated results between countries. We provide a welfare formula comparable to that in ACR to show how the new mechanisms can interplay in our model and highlight the effects of firm heterogeneity in this context. In all cases net welfare results depend on parameter values which highlights how much welfare evaluations depend on region's characteristics. |
| Keywords: | firm heterogeneity; expanding varieties; asymmetric countries; welfare |
| JEL: | F12 F15 H32 O40 |
| Date: | 2017–02–24 |
| URL: | http://d.repec.org/n?u=RePEc:ctl:louvir:2017004&r=cfn |