Tax policy expectations and investment

This paper examines how firms’ tax policy expectations (TPE) evolve around and relate to their investment responses to changes in tax policy. Using a text-based approach to measuring TPE, we find that two recent tax policy–changing events—namely, the 2016 U.S. presidential election and the enactment...

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Detalhes bibliográficos
Autores: Gallemore, J. (John)|||/items/ddc5fe08-f49a-44f1-8ee7-642c13fc94dc, Hollander, S. (Stephan)|||/items/caba40a8-b5ce-4700-848c-10ef6c10287c, Jacob, M. (Martin)|||/items/b4c80971-c877-4230-904c-54573540e482, Zheng, X. (Xiang)|||/items/f7e97ffb-f9b0-4b91-a660-6ed13aeb2d67
Formato: artículo
Fecha de publicación:2024
País:España
Recursos:Universidad de Navarra
Repositorio:Dadun. Depósito Académico Digital de la Universidad de Navarra
Idioma:inglés
OAI Identifier:oai:dadun.unav.edu:10171/116581
Acesso em linha:https://hdl.handle.net/10171/116581
Access Level:acceso embargado
Palavra-chave:Tax policy
Tax policy expectations
Tax reform
Investment
Text as data
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spelling Tax policy expectations and investmentGallemore, J. (John)|||/items/ddc5fe08-f49a-44f1-8ee7-642c13fc94dcHollander, S. (Stephan)|||/items/caba40a8-b5ce-4700-848c-10ef6c10287cJacob, M. (Martin)|||/items/b4c80971-c877-4230-904c-54573540e482Zheng, X. (Xiang)|||/items/f7e97ffb-f9b0-4b91-a660-6ed13aeb2d67Tax policyTax policy expectationsTax reformInvestmentText as dataThis paper examines how firms’ tax policy expectations (TPE) evolve around and relate to their investment responses to changes in tax policy. Using a text-based approach to measuring TPE, we find that two recent tax policy–changing events—namely, the 2016 U.S. presidential election and the enactment of the Tax Cuts and Jobs Act (TCJA)—spawned considerable between- and within-firm variation in TPE, with aggregate time-series patterns in TPE occasionally challenging prevailing assumptions in previous research. Further, we observe that event-induced TPE relate to investment both before and in response to the TCJA's passage in 2017, with offsetting associations between its first and second moments, and that these TPE moderate the TCJA's intended investment-stimulating effect. Furthermore, we document a difference between domestic and multinational firms in their TPE-investment response, with the former (latter) more likely to adjust the level (shift the country location) of their investment. Overall, our findings support the idea that TPE can impact investment behavior in the face of a tax policy change and suggest that our methodology can be used by future research to incorporate TPE into analyses of tax policy effects.WileyDadun. Depósito Académico Digital Universidad de Navarra20242024-09-2520242024-09-25journal articlehttp://purl.org/coar/resource_type/c_6501info:eu-repo/semantics/articleapplication/pdfhttps://hdl.handle.net/10171/116581reponame:Dadun. Depósito Académico Digital de la Universidad de Navarrainstname:Universidad de NavarraInglésengembargoed accesshttp://purl.org/coar/access_right/c_f1cfinfo:eu-repo/semantics/embargoedAccessoai:dadun.unav.edu:10171/1165812026-06-21T12:47:57Z
dc.title.none.fl_str_mv Tax policy expectations and investment
title Tax policy expectations and investment
spellingShingle Tax policy expectations and investment
Gallemore, J. (John)|||/items/ddc5fe08-f49a-44f1-8ee7-642c13fc94dc
Tax policy
Tax policy expectations
Tax reform
Investment
Text as data
title_short Tax policy expectations and investment
title_full Tax policy expectations and investment
title_fullStr Tax policy expectations and investment
title_full_unstemmed Tax policy expectations and investment
title_sort Tax policy expectations and investment
dc.creator.none.fl_str_mv Gallemore, J. (John)|||/items/ddc5fe08-f49a-44f1-8ee7-642c13fc94dc
Hollander, S. (Stephan)|||/items/caba40a8-b5ce-4700-848c-10ef6c10287c
Jacob, M. (Martin)|||/items/b4c80971-c877-4230-904c-54573540e482
Zheng, X. (Xiang)|||/items/f7e97ffb-f9b0-4b91-a660-6ed13aeb2d67
author Gallemore, J. (John)|||/items/ddc5fe08-f49a-44f1-8ee7-642c13fc94dc
author_facet Gallemore, J. (John)|||/items/ddc5fe08-f49a-44f1-8ee7-642c13fc94dc
Hollander, S. (Stephan)|||/items/caba40a8-b5ce-4700-848c-10ef6c10287c
Jacob, M. (Martin)|||/items/b4c80971-c877-4230-904c-54573540e482
Zheng, X. (Xiang)|||/items/f7e97ffb-f9b0-4b91-a660-6ed13aeb2d67
author_role author
author2 Hollander, S. (Stephan)|||/items/caba40a8-b5ce-4700-848c-10ef6c10287c
Jacob, M. (Martin)|||/items/b4c80971-c877-4230-904c-54573540e482
Zheng, X. (Xiang)|||/items/f7e97ffb-f9b0-4b91-a660-6ed13aeb2d67
author2_role author
author
author
dc.contributor.none.fl_str_mv Dadun. Depósito Académico Digital Universidad de Navarra
dc.subject.none.fl_str_mv Tax policy
Tax policy expectations
Tax reform
Investment
Text as data
topic Tax policy
Tax policy expectations
Tax reform
Investment
Text as data
description This paper examines how firms’ tax policy expectations (TPE) evolve around and relate to their investment responses to changes in tax policy. Using a text-based approach to measuring TPE, we find that two recent tax policy–changing events—namely, the 2016 U.S. presidential election and the enactment of the Tax Cuts and Jobs Act (TCJA)—spawned considerable between- and within-firm variation in TPE, with aggregate time-series patterns in TPE occasionally challenging prevailing assumptions in previous research. Further, we observe that event-induced TPE relate to investment both before and in response to the TCJA's passage in 2017, with offsetting associations between its first and second moments, and that these TPE moderate the TCJA's intended investment-stimulating effect. Furthermore, we document a difference between domestic and multinational firms in their TPE-investment response, with the former (latter) more likely to adjust the level (shift the country location) of their investment. Overall, our findings support the idea that TPE can impact investment behavior in the face of a tax policy change and suggest that our methodology can be used by future research to incorporate TPE into analyses of tax policy effects.
publishDate 2024
dc.date.none.fl_str_mv 2024
2024-09-25
2024
2024-09-25
dc.type.none.fl_str_mv journal article
http://purl.org/coar/resource_type/c_6501
dc.type.openaire.fl_str_mv info:eu-repo/semantics/article
format article
dc.identifier.none.fl_str_mv https://hdl.handle.net/10171/116581
url https://hdl.handle.net/10171/116581
dc.language.none.fl_str_mv Inglés
eng
language_invalid_str_mv Inglés
language eng
dc.rights.none.fl_str_mv embargoed access
http://purl.org/coar/access_right/c_f1cf
dc.rights.openaire.fl_str_mv info:eu-repo/semantics/embargoedAccess
rights_invalid_str_mv embargoed access
http://purl.org/coar/access_right/c_f1cf
eu_rights_str_mv embargoedAccess
dc.format.none.fl_str_mv application/pdf
dc.publisher.none.fl_str_mv Wiley
publisher.none.fl_str_mv Wiley
dc.source.none.fl_str_mv reponame:Dadun. Depósito Académico Digital de la Universidad de Navarra
instname:Universidad de Navarra
instname_str Universidad de Navarra
reponame_str Dadun. Depósito Académico Digital de la Universidad de Navarra
collection Dadun. Depósito Académico Digital de la Universidad de Navarra
repository.name.fl_str_mv
repository.mail.fl_str_mv
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