Investment Effects of Taxation

Jacob and Sureth-Sloane explore the effect of taxes and tax-related transparency on different types of investment. They study not only how taxes affect investment, but also under which conditions effects may be stronger or muted. They comprehensively examine the combined effect of a broad set of taxes on an array of business decisions and how transparency about various tax regimes translates into decisions. Furthermore, they study how tax regimes affect investments differently across investment types. Finally, they explore the heterogeneity in tax effects and the spillover effects of taxation on corporate stakeholders.

  • Forschungsfrage

    How do taxes and tax-related transparency affect firm-level investment behavior?

  • Motivation

    Understanding how regulatory information translates into business decisions such as capital investment, employment, R&D, or tax planning is key to aggregate economic growth and prosperity. This is particularly important since firms have to comply with an increasingly complex and intransparent set of existing and newly introduced tax regulations that interact with each other. However, because of a lack of studies that try to face the challenge of comprehensively examining the arising tax effects, politicians can often only guess whether new tax regulations are indeed appropriate tools to reach their objectives. To date, we still know little about how taxpayers respond to changes in the tax environment potentially because of the complexity of tax systems and their interactions.

  • Forschungsprogramm

    The aim of this project is to study the effect of taxation on real decisions and especially on firm
    investments. This includes investigating the effect of new tax transparency-driven regulation,
    for example tax-related reporting requirements, on business decisions. We study not only how taxes affect investment, but also under which conditions effects may be stronger or muted. We comprehensively examine the combined effect of a broad set of taxes on an array of business decisions and how transparency about various tax regimes translates into decisions. Furthermore, we study how tax regimes affect investments differently across investment types. Finally, we explore the heterogeneity in tax effects and the spillover effects of taxation on corporate stakeholders.

  • Contribution

    In general, our research will help understand when tax regulation and the inherent quality of information can foster, or hinder, different types of investments. Our theoretical models will serve as input for future research on the investment decision effects of newly released and reformed tax regulation.

Beteiligte Institutionen

Die Hauptstandorte vom TRR 266 sind die Universität Paderborn, die HU Berlin und die Universität Mannheim. Alle drei Standorte sind seit vielen Jahren Zentren für Rechnungswesen- und Steuerforschung. Hinzu kommen Wissenschaftler der LMU München, der Frankfurt School of Finance and Management, der WHU – Otto Beisheim School of Management, der European School of Management and Technology in Berlin und der Goethe-Universität Frankfurt, die die gleiche Forschungsagenda verfolgen.