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Project Citation: 

Ohrn, Eric. Replication data for: The Effect of Corporate Taxation on Investment and Financial Policy: Evidence from the DPAD. Nashville, TN: American Economic Association [publisher], 2018. Ann Arbor, MI: Inter-university Consortium for Political and Social Research [distributor], 2019-10-13. https://doi.org/10.3886/E114661V1

Project Description

Summary:  View help for Summary This study estimates the investment, financing, and payout responses to variation in a firm's effective corporate income tax rate in the United States. I exploit quasi-experimental variation created by the Domestic Production Activities Deduction, a corporate tax expenditure created in 2005. A 1 percentage point reduction in tax rates increases investment by 4.7 percent of installed capital, increases payouts by 0.3 percent of sales, and decreases debt by 5.3 percent of total assets. These estimates suggest that lower corporate tax rates and faster accelerated depreciation each stimulate a similar increase in investment, per dollar in lost revenue.

Scope of Project

Subject Terms:  View help for Subject Terms investment; capital structure; Domestic Production Activities Deduction; corporate taxation
JEL Classification:  View help for JEL Classification
      D22 Firm Behavior: Empirical Analysis
      D25 Intertemporal Firm Choice: Investment, Capacity, and Financing
      G31 Capital Budgeting; Fixed Investment and Inventory Studies; Capacity
      G32 Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
      H25 Business Taxes and Subsidies including sales and value-added (VAT)
      H32 Fiscal Policies and Behavior of Economic Agents: Firm
Geographic Coverage:  View help for Geographic Coverage United States
Time Period(s):  View help for Time Period(s) 2014 – 2018
Data Type(s):  View help for Data Type(s) observational data

Methodology

Data Source:  View help for Data Source IRS Statistics of Income, Standard and Poor's Compustat North American Annual Fundamentals
Unit(s) of Observation:  View help for Unit(s) of Observation Publicly Traded Companies,

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