scholarly journals Tax Policy and Lumpy Investment Behavior: Evidence from China's VAT Reform

2019 ◽  
Author(s):  
Zhao Chen ◽  
Xian Jiang ◽  
Zhikuo Liu ◽  
Juan Carlos Suárez Serrato ◽  
Daniel Xu
Keyword(s):  
Tax Policy ◽  
Investment Behavior ◽  
Lumpy Investment ◽  
Vat Reform

Lumpy Investment, Business Cycles, and Stimulus Policy

2021 ◽  
Vol 111 (1) ◽  
pp. 364-396 ◽  
Author(s):  
Thomas Winberry
Keyword(s):  
Interest Rate ◽  
Business Cycles ◽  
Interest Rates ◽  
Real Interest Rate ◽  
Extensive Margin ◽  
Investment Behavior ◽  
The Real ◽  
Lumpy Investment ◽  
Aggregate Investment ◽  
Micro Level

I study the aggregate implications of micro-level lumpy investment in a model consistent with the empirical dynamics of the real interest rate. The elasticity of aggregate investment with respect to shocks is procyclical because more firms are likely to make an extensive margin investment in expansions than in recessions. Matching the dynamics of the real interest rate is key to generating this result because it disciplines the interest-elasticity of investment and avoids counterfactual behavior of the model that would otherwise eliminate most of the procyclical responsiveness. Therefore, data on interest rates place important discipline in aggregating micro-level investment behavior. (JEL D25, E13, E22, E23, E43, G31, H25)

scholarly journals Tax Policy and Heterogeneous Investment Behavior

2017 ◽  
Vol 107 (1) ◽  
pp. 217-248 ◽  
Author(s):  
Eric Zwick ◽  
James Mahon
Keyword(s):  
Tax Policy ◽  
Small Firms ◽  
Financial Frictions ◽  
Tax Incentives ◽  
Cash Flows ◽  
Investment Behavior ◽  
Fixed Costs ◽  
Weighted Estimates ◽  
Equipment Investment ◽  
Accelerated Depreciation

We estimate the effect of temporary tax incentives on equipment investment using shifts in accelerated depreciation. Analyzing data for over 120,000 firms, we present three findings. First, bonus depreciation raised investment in eligible capital relative to ineligible capital by 10.4 percent between 2001 and 2004 and 16.9 percent between 2008 and 2010. Second, small firms respond 95 percent more than big firms. Third, firms respond strongly when the policy generates immediate cash flows, but not when cash flows only come in the future. This heterogeneity materially affects investment-weighted estimates and supports models in which financial frictions or fixed costs amplify investment responses. (JEL D21, D22, D92, G31, H25, H32)

scholarly journals Lumpy Investment and Corporate Tax Policy

2014 ◽  
Vol 46 (6) ◽  
pp. 1171-1203 ◽  
Author(s):  
JIANJUN MIAO ◽  
PENGFEI WANG
Keyword(s):  
Tax Policy ◽  
Corporate Tax ◽  
Lumpy Investment

Investment Behavior and Tax Policy

1998 ◽  
Vol 13 (3) ◽  
pp. 185-196 ◽  
Author(s):  
CARSTEN LYNGE JENSEN
Keyword(s):  
Tax Policy ◽  
Investment Behavior
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