Progressive taxation and corporate liquidation policy

Agliardi, Elettra; Agliardi, Rossella

doi:10.1016/j.econmod.2007.08.003

Cited by 24 publications

(13 citation statements)

References 21 publications

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“…Although the studies in turn of this subject tend to be circumscribed to a unique firm or group of integrated firms that undertake diversified activities, with the managers within each department or division negotiating with the shareholders the corresponding budget allocations, such discussion is straightforward to extrapolate to our environment of a unique representative investor in the economy. About agency and power relations within the firm, with consequences on the allocation of scarce resources see, e.g., Shleifer and Vishny (1989), La Porta et al (2000), Rajan et al (2000), Burkart and Panunzi (2006), Agliardi and Agliardi (2008), Albuquerque and Wang (2008) and Chetty and Saez (2010).…”

Section: Theoretical Foundationsmentioning

confidence: 99%

Optimal resource allocation in a representative investor economy

Gomes

2015

Economic Modelling

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The Ramsey-Cass-Koopmans neoclassical growth setup and the AK endogenous growth framework are two prototypes of a class of growth models where, by assumption, investment resources are always perfectly allocated to production. As a corollary, these models offer a partial view of the growth process circumscribed to a limit case, namely the most favorable case in which all possible frictions on the allocation of investment resources are absent. This paper adds to the conventional growth setup an optimal mechanism of assignment of investment resources that contemplates the possibility of inefficient allocation. In the assumed economy there is a single representative investor and a large number of firms that compete for the available resources. The new setup highlights how agency costs may deviate the economy from the benchmark growth outcome, potentially generating less desirable long-run results. The appeal of the proposed framework resides also on the fact that new determinants of growth emerge and take a leading role, namely the investor's sentiment and the quality of the firms' investment proposals.

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Section: Theoretical Foundationsmentioning

confidence: 99%

Optimal resource allocation in a representative investor economy

Gomes

2015

Economic Modelling

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“…Other analyses capture exit flexibility. Agliardi andAgliardi (2008 and2009) employ a continuous-time real option model, which has been extended by Wong (2009), to investigate the impact of progressive taxation on entrepreneurial divestment decisions. The authors find a progressive tax schedule can foster or hinder closure policy in the case of loss-offset restrictions.…”

Section: Prior Literaturementioning

confidence: 99%

Can Tax Rate Increases Foster Investment Under Entry and Exit Flexibility? - Insights from an Economic Experiment

2014

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ABSTRACT:It is well-known that taxes affect risky investment decisions. Analytical studies indicate that tax rate increases (decreases) can foster (hinder) investment if there is flexibility, in particular when an exit option is available. We design an experiment based on an analytical model with binomial random walk and entry and exit flexibility. Contrasting the underlying model, we find accelerated investment, which is often considered as an increased willingness to invest, on tax rate increases to be independent of the existence of an exit option. However, we observe this investor reaction only for a tax increase, not for a tax decrease. This behavior is driven possibly by tax salience and the mechanisms known from the theory of irreversible choice under uncertainty. Our empirical evidence suggests that the at-first-sight unexpected tax reform effects are more common than is predicted by the theoretical literature. Policy makers should therefore carefully consider the behavioral aspects when anticipating taxpayer reactions. JEL Classification: H25, H21, C91

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“…Emission quotas (also known as "assigned amounts") were agreed by each participating Annex 1 country, with the intention of reducing their average emissions during 2008-2012 to about 5 percent below 1990 levels 3 . As a consequence of a growing interest in the use of di¤erent types of policy instruments to control pollution, a large number of articles have been published in the environmental economics literature with the intent to investigate the rel- 1 The principal greenhouse gases that enter the atmosphere because of human activities are: carbon dioxide (CO 2 ), methane (CH 4 ), nitrous oxide (N 2 O), sulphur hexa ‡uoride (SF 6 ), hydro ‡uorocarbons (HFCs) and per ‡uorocarbons (PFCs), among many others. See: http://www.epa.gov/climatechange/emissions/index.html.…”

Section: Introductionmentioning

confidence: 99%

“…It is often indicated as a key factor to implement a more sustainable development worldwide. Environmental policy instruments are tools used by governments in order to prevent, reduce or mitigate harmful e¤ects on terrestrial and marine ecosystems of accumulating greenhouse gases 1 . Examples of environmental policy instruments include: 1) tradable emissions permits (also known as cap and trade) and environmental taxes (also referred to as market-based instruments); 2) quotas, targets for cutting emissions and commands (also referred to as command-and-control instruments).…”

Section: Introductionmentioning

confidence: 99%

The effects of environmental taxes and quotas on the optimal timing of emission reductions under Choquet–Brownian uncertainty

Agliardi

Sereno

2011

Economic Modelling

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The e¤ects of two environmental policy options for the reduction of pollution emissions, i.e. taxes and non-tradable quotas, are analyzed. In contrast to the prior literature this work endogenously takes into account the level of emissions before and after the adoption of the new environmental policy. The level of emissions is determined by solving the …rm's pro…t maximization problem under taxes and …xed quotas. We …nd that the optimal adoption threshold under taxes is always larger than the adoption threshold under …xed quota, even in a setting characterized by ecological uncertainty and ambiguity -in the form of Choquet-Brownian motionson future costs and bene…ts over adopting environmental policies.

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Progressive taxation and corporate liquidation policy

Cited by 24 publications

References 21 publications

Optimal resource allocation in a representative investor economy

Optimal resource allocation in a representative investor economy

Can Tax Rate Increases Foster Investment Under Entry and Exit Flexibility? - Insights from an Economic Experiment

The effects of environmental taxes and quotas on the optimal timing of emission reductions under Choquet–Brownian uncertainty

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