The Impact of Investment Incentives: Evidence from UK Corporation Tax Returns

• 成果类型: Article
• 署名作者: Maffini, Giorgia; Xing, Jing; Devereux, Michael P.
• 署名单位: University of Oxford; Bocconi University; Shanghai Jiao Tong University
• 刊物名称: AMERICAN ECONOMIC JOURNAL-ECONOMIC POLICY
• ISSN/ISSBN: 1945-7731
• DOI: 10.1257/pol.20170254
• 发表日期: 2019
• 页码: 361-389
• 关键词: Financial constraints; taxation; POLICY

摘要

Using UK corporation tax returns, we provide evidence on the effects of accelerated depreciation allowances on investment, exploiting exogenous changes in the qualifying thresholds for first-year depreciation allowances (FYAs) in 2004. The investment rate of qualifying companies increased by 2.1-2.5 percentage points relative to those that did not qualify. We exploit variation in the timing of lax payments to show that this effect is primarily due to the change in the cost of capital, rather than a relaxation of financial constraints. Discontinuity at notches in the cost of capital at the qualifying thresholds does not affect our results.