Restricting Interest Deductions in Corporate Tax Systems: Its Impact on Investment Decisions and Capital Markets

2008 ◽  
Author(s):  
Christoph Kaserer
Keyword(s):  
Capital Markets ◽  
Investment Decisions ◽  
Corporate Tax ◽  
Tax Systems

Investors' Responses to Social Conflict between CSR and Corporate Tax Avoidance

2020 ◽  
Vol 19 (1) ◽  
pp. 57-72
Author(s):  
David J. Emerson ◽  
Ling Yang ◽  
Ruilian Xu
Keyword(s):  
Investment Decisions ◽  
Tax Avoidance ◽  
Negative Influence ◽  
Negative Consequences ◽  
Corporate Tax ◽  
Stakeholder Values ◽  
Area Of Interest ◽  
Joint Influence ◽  
Corporate Social ◽  
Investment Intentions

ABSTRACT There is often conflict between disclosures and actions in corporate operations. One area of interest relates to the joint influence of tax avoidance and Corporate Social Responsibility on economic outcomes. We evaluate investor perceptions when these corporate behaviors are in conflict, and our results indicate that tax avoidance negatively influences investment decisions. We find that although CSR in isolation has no direct effect, the negative influence of tax avoidance is tempered when it is present. We provide evidence that not only do a firm's policies related to CSR and tax avoidance result in diverse investment intentions, but also that it is the individual's unique beliefs on ethics and CSR that appear to be driving these differences. Our results suggest that espousing stakeholder values serves as a shield to protect the company from the negative consequences associated with tax avoidance, and that individual attitudes can shape perceptions relative to these behaviors.

Besteuerungsprinzipien und effektive Unternehmenssteuerbelastungen in der Europäischen Union: Regelt sich die EU-weite Steuerharmonisierung von selbst?

2011 ◽  
Vol 12 (1) ◽  
pp. 47-71 ◽  
Author(s):  
Christina Elschner ◽  
Jost H. Heckemeyer ◽  
Christoph Spengel
Keyword(s):  
European Union ◽  
Investment Decisions ◽  
Tax Rates ◽  
Eu Law ◽  
The European Union ◽  
Corporate Tax ◽  
Cross Border ◽  
Tax Regimes ◽  
Country Specific ◽  
The Eu

AbstractEU law demands that the allocation of factors and goods within the European Union shall not be distorted by taxes. Efforts to formally harmonize corporate tax regimes in Europe have, however, stalled in recent years. What is more, the source principle has prevailed over residence based taxation which is seen to be more in line with EU law. Tax induced distortions of cross-border investment decisions are supposed to be the consequence. Based on country-specific effective average tax rates from 1998 to 2009, this article shows that there is, however, non-coordinated convergence of tax burdens within the EU. Thus, distortions of cross-border investment decisions are limited and decreasing even without formal harmonization.

scholarly journals Corporate governance, agency costs and investment appraisal: An assessment

2012 ◽  
Vol 9 (4-2) ◽  
pp. 208-220
Author(s):  
Baliira Kalyebara ◽  
Abdullahi D. Ahmed
Keyword(s):  
Corporate Governance ◽  
Interest Rates ◽  
Capital Markets ◽  
Capital Market ◽  
Firm Value ◽  
Agency Costs ◽  
Investment Decisions ◽  
Market Interactions ◽  
Investment Appraisal

Undoubtedly, capital markets have an impact on investment appraisal decisions through interest rates (cost of capital) charged and debt covenants stipulated in debt contracts. However, the extent of influence of their interactions in shaping and determining a firm’s corporate governance policy, agency costs, investment decisions and firm value has been overlooked or not duly emphasised in the literature to date. This lack of interdisciplinary research in areas such as finance, accounting, capital markets and corporate governance may lead financial managers making wrong interpretation of the current empirical evidence. This may result into suboptimal decisions in capital budgeting decisions. There are various existing studies that have discussed the relation between corporate governance and one or two other business topics this paper is assessing. However, questions have persisted about the role capital markets’ interactions play in determining firm’s corporate governance, minimizing agency costs, long term investment decisions and firm value. The recent high profile global company collapses mainly due to poor corporate governance mechanisms have rekindled the interest in the role capital market interactions play in formulating firm’s corporate governance rules and policies and their impact on agency costs, investment appraisal decisions and firm value. This study intends to assess this issue and critically evaluates these related issues. The impact of multiple objectives on long-term investment decisions is also discussed. We find that capital market interactions have a significant impact in the way firms formulate their corporate governance, identify and control agency costs, optimize multiple objectives, make investment decisions and determine firm value. In a nutshell, there is a consensus among researchers that capital markets impact on capital investment decisions and firm value through interest rates, debt covenants that impact on managers’ self-interest behaviour, corporate governance policies and agency costs.

Business Power and Tax Reform: Taxing Income and Profits in Chile and Argentina

2010 ◽  
Vol 52 (2) ◽  
pp. 37-71 ◽  
Author(s):  
Tasha Fairfield
Keyword(s):  
Tax Evasion ◽  
Structural Adjustment ◽  
Information Access ◽  
Investment Decisions ◽  
Policy Agenda ◽  
Corporate Tax ◽  
Firm Level ◽  
Structural Power ◽  
Business Power ◽  
Political Actions

AbstractThis article examines efforts to increase taxation of highly concentrated, undertapped income and profits in Latin America in the aftermath of structural adjustment. Argentina has advanced further than Chile in two policy areas: corporate taxation, which taps firm-level profits; and tax agency access to bank information, which helps reduce income tax evasion. These outcomes are explained by drawing on the classic concepts of business instrumental power, which entails political actions, and structural power, which arises from investment decisions. In Chile, strong instrumental power removed reforms in both areas from the policy agenda. In Argentina, much weaker instrumental power at the cross-sectoral level facilitated corporate tax increases. Bank information access was expanded after Argentina's 2001 crisis weakened the financial sector's instrumental power and reduced structural power.

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