scholarly journals Stock Market Reactions to Legislated Tax Changes: Evidence from the United States, Germany, and the United Kingdom

2021 ◽  
Author(s):  
Bernd Hayo ◽  
Sascha Mierzwa
Keyword(s):  
United States ◽  
United Kingdom ◽  
Stock Market ◽  
The United States ◽  
Market Reactions ◽  
The United Kingdom ◽  
Tax Changes ◽  
Stock Market Reactions

scholarly journals Discretionary Tax Changes and the Macroeconomy: New Narrative Evidence from the United Kingdom

2013 ◽  
Vol 103 (4) ◽  
pp. 1507-1528 ◽  
Author(s):  
James Cloyne
Keyword(s):  
United States ◽  
United Kingdom ◽  
The United States ◽  
Policy Changes ◽  
Narrative Strategy ◽  
The United Kingdom ◽  
Macroeconomic Effects ◽  
The Uk ◽  
Tax Changes ◽  
Strategy I

This paper provides new estimates of the macroeconomic effects of tax changes using a new narrative dataset for the United Kingdom. Identification is achieved by isolating “exogenous” tax policy changes using the Romer and Romer narrative strategy. I find that a 1 percent cut in taxes increases GDP by 0.6 percent on impact and 2.5 percent over three years. The findings are remarkably similar to Romer and Romer narrative estimates for the United States, reinforcing the view that tax changes have powerful and persistent effects. “Exogenous” tax changes are also shown to have contributed to important episodes in the UK business cycle. (JEL E23, E32, E62, H20, H61)

Commentary on the Enigma of Chinese Performance: Do Chinese Investors’ Reactions to Merger Announcements Accurately Reflect Prospects for Success?

2016 ◽  
Vol 12 (2) ◽  
pp. 249-257 ◽  
Author(s):  
Michael N. Young
Keyword(s):  
United States ◽  
Stock Market ◽  
Organizational Development ◽  
The United States ◽  
Chinese Stock Market ◽  
Short Term ◽  
Market Reactions ◽  
Event Study Method ◽  
Stock Market Reactions ◽  
Merger Announcements

Although McCarthy, Dolfsma, and Weitzel (2016) cover much ground in their study, in this commentary I focus on alternative explanations for the empirical results indicating that Chinese acquirers outperformed acquirers from other countries – particularly acquirers from the United States. First, based on research I have done with colleagues (e.g., Chen & Young, 2010; Young & McGuinness, 2001) and that of a doctoral student (Tang, 2016), I suggest that comparison of Chinese stock market reactions to merger announcements with stock market reactions to merger announcements from more mature markets, such as the United States, may create some misleading results. The Event Study Method (ESM) used in this study is a measure of investors’ short-term reactions to unanticipated events and it assumes that investors are capable of accurately evaluating such events (MacKinlay, 1997; McWilliams & Siegel, 1997). I suggest that, given the relative newness of Chinese stock markets, Chinese investors may have reacted more positively to merger announcements regardless of the mergers’ prospects for success. Second, similar to Shapiro and Li (2016), I suggest that stages of industry and organizational development better explain the actual motivation and success of Chinese acquirers than does a general theory of culture or corporate governance traditions.

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