The Effects of Differential Taxation on Managerial Effort and Risk Taking

Niemann, Rainer

doi:10.1628/001522108x374142

Cited by 20 publications

(15 citation statements)

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“…This unilateral approach is mostly motivated by the researchers' interest in the effect of a particular tax rate or legislation act such as the placement of tax deductibility limitations on managerial compensation (see, e.g., Göx 2008) or the introduction of a bonus tax (see, e.g., Radulescu 2012). On the other hand, there are only a few papers that try to incorporate several taxes and as a result present the overall effects of taxation (see, e.g., Niemann 2008).…”

Section: Discussionmentioning

confidence: 99%

“…When analyzing the effect of corporate taxation on a delegated portfolio investment decision in which the manager is compensated based on a pre-tax performance contract, Niemann (2008) finds that a preferential tax base for the high risk project increases investment in high risk projects, while a preferential tax rate has no such effect. This result leads to the following empirical prediction: Prediction 8 (Risky investment projects and preferential tax base) Managers invest more in risky projects if the tax system has a preferential tax base for highrisk projects.…”

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confidence: 99%

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Taxation and agency conflicts between firm owners and managers: a review

Bauer

Kourouxous

Krenn

2017

Bus Res

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When analyzing the influence of taxation on agency conflicts between firm owners and managers, one can draw on theoretical principal-agent literature from various research fields. In recent years, this interdisciplinary research has grown significantly covering research with regards to optimal compensation, investment decisions, tax avoidance and transfer pricing while analyzing the effects of corporate income taxes, wage taxes, bonus taxes and shareholder taxes. Our paper provides a comprehensive review of analytical literature that studies the influence of taxation on agency conflicts between firm owners and managers. Above and beyond summarizing research findings, we discuss how taxes are commonly implemented in We thank Claire Estebanez, Joachim Gassen, Thomas Gehrig, Rainer Niemann, Thomas Pfeiffer, and two anonymous referees for their valuable comments and suggestions. We are grateful to participants at the VHB conference 2016, the DART Accounting Workshop at the University of Graz and a research seminar at the University of Vienna.

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Section: Discussionmentioning

confidence: 99%

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confidence: 99%

Taxation and agency conflicts between firm owners and managers: a review

Bauer

Kourouxous

Krenn

2017

Bus Res

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“…We further assume that either the agents are present in the host country for a sufficiently long period or that the remunerations are borne by a permanent establishment in the 6 See Niemann (2008), Niemann (2011), or Voßmerbäumer (2013 for a discussion of gross and net performance measures. 7 Observe that, in combination with the specification of π i j , this formulation is as general asẽ 2 i j /α i with α i > 0.…”

Section: Model Setupmentioning

confidence: 99%

“…In a moral hazard model of the LEN type, Niemann (2008) investigates the impact of a tax system that differentiates between investment projects with different risk levels. He shows that symmetric taxation leaves the managerial portfolio choice unchanged compared to the pre-tax case.…”

Section: Introductionmentioning

confidence: 99%

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The impact of taxation on international assignment decisions: a principal–agent approach

Martini

Niemann

2014

Rev Manag Sci

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. The Impact of Taxation on International Assignment Decisions -A Principal-Agent Approach Terms of use: Documents in AbstractIn many industries like management consulting, IT consulting, or construction highly qualified employees, i.e., experts or executive managers, have to be assigned to temporary projects. In firms with many employees and various different projects, this assignment decision involves a complex optimization procedure. Obviously, the employees' productivities in the respective projects are crucial for the employer's optimal assignment decision, but assignment can also be affected by risk-incentive trade-offs. Moreover, taxation can alter the assignment decision, especially if employees are sent abroad as expatriates so that international tax law has to be taken into account. To address these issues simultaneously, we combine a human resource assignment problem with a principal-agent problem of the LEN type. Both wage taxation at the agents' level and corporate taxation at the principal's level are integrated. We show that national tax rules as well as the methods for avoiding double taxation and the agents' tax characteristics are important determinants for international assignment decisions. The effects of tax rate variations can be ambiguous and depend on whether the exemption method or the credit method are applied, in particular if agents make differing choices of residence. From a tax policy perspective, the exemption method should be preferred because the tax effects are more transparent than under the credit method. Special deductions for incoming expatriates have only little effects on the optimal assignment decision.JEL-Code: H240, H250, M410.

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The Impact of Corporate Income Taxation on Location Choice of Investments: Separate Accounting Versus Formula Apportionment

Celebi

2017

The Impact of Globalization on International Finance and Accounting

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The Effects of Differential Taxation on Managerial Effort and Risk Taking

Cited by 20 publications

References 65 publications

Taxation and agency conflicts between firm owners and managers: a review

Taxation and agency conflicts between firm owners and managers: a review

The impact of taxation on international assignment decisions: a principal–agent approach

The Impact of Corporate Income Taxation on Location Choice of Investments: Separate Accounting Versus Formula Apportionment

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