Dividend Taxes and the Allocation of Capital: Comment
AbstractBoissel and Matray (2022) find that investment increased after 2013 in French firms facing higher dividend taxes. We identify an alteration in the code plotting the event study of the effect of this reform on investment. Using identical data and removing this alteration, we find differential pre-trends between treated and control firms. We also establish that the controls referred to as "size growth," used in all the difference-in-difference specifications, effectively are controls for lagged investment, i.e., the main outcome variable. Removing such controls attenuates differential pre-trends but leaves no clear event study evidence of a positive effect of dividend taxation on investment.
CitationBach, Laurent, Antoine Bozio, Arthur Guillouzouic, and Clément Malgouyres. 2023. "Dividend Taxes and the Allocation of Capital: Comment." American Economic Review, 113 (7): 2048-52. DOI: 10.1257/aer.20221432
- D22 Firm Behavior: Empirical Analysis
- G31 Capital Budgeting; Fixed Investment and Inventory Studies; Capacity
- G35 Payout Policy
- H25 Business Taxes and Subsidies including sales and value-added (VAT)
- H32 Fiscal Policies and Behavior of Economic Agents: Firm