Faculty & Research
Business taxation and corporate behaviour: evidence from EU administrative data
Governments in developed countries currently face a seemingly irreconcilable trade-off; they need to raise revenues and, at the same time, foster investment in a scenario of very low or negative growth, high unemployment and declining real wages. Business taxation is a key policy tool in this scenario, and tax policy has been employed across Europe to either encourage economic growth through tax cuts or to consolidate public finances through tax rises. The research project will estimate the effect of tax policies on business behaviour.
The research focuses on three different elements instrumental to rebuilding the economy after the crisis: corporate investment, the capital structure of the firm, and the behaviour of the financial sector. It is the first empirical contribution on the taxation of the banking industry using administrative data. Academics and policymakers support taxes as a complement to regulation of a stable and efficient financial system. The project is the first to empirically investigate a Financial Activities Tax, which is a unique opportunity to study a tax proposed by the IMF (International Monetary Fund).
It is also one of the first contributions on firms’ investment and capital structure responses to tax using confidential administrative data.
October 2013 - September 2016