Research Interests


This paper examines the effect of dividend taxation on the ownership structure of private firms. I exploit a German dividend tax increase that only affects corporate shareholders owning a minority stake. Using data on private German firms and their shareholders, I find that corporate shareholders reduce their minority stakes in firms after the dividend tax reform. This result is in line with the notion that, because minority shareholders do not have sufficient decision-making power to influence the payout policy, they can only react to a dividend tax increase by selling their shares. This effect is larger when the affected minority shareholders face high dividend tax costs. However, I find a smaller effect when the benefits of the minority stakes are highly relevant for the firm and the affected shareholders, suggesting that non-tax factors mute the response to dividend taxes. In addition, I find that the largest shareholder of the firm buys the minority stake, resulting in greater ownership concentration. These findings extend the prior literature that finds no effect of dividend taxes on the ownership structure of private firms.

Working Papers

This paper examines the corporate investment effect of a time limit on the use of net operating losses (NOLs). We predict that, when countries limit the use of NOLs to a few years instead of allowing indefinite use, managers of loss-making firms have an incentive to increase investments to recover these losses quickly. Using exogenous shocks to profitability from two earthquakes in Italy and variation in the tax treatment of NOLs over time, we find support for this prediction: when the use of NOLs is restricted in time (unrestricted), firms facing losses increase (do not increase) investment. This effect is stronger for firms with shorter investment horizons, in more profitable industries, and with less volatile profits. We provide external validity for this finding using a large panel of firms from European Union countries exploiting variation in tax regimes. These results indicate that restricting loss offsets can increase investments.

This paper examines the role of personal income taxes in multinationals’ corporate tax–induced profit shifting. As required by corporate tax rules in most countries, firms need economic substance in low–corporate tax countries to justify profit shifting to these countries. Because higher personal income taxes increase the cost of labor and thus the cost of providing economic substance, we argue that personal income taxes can mute corporate tax–induced profit shifting. Using data on personal and corporate income taxes from 26 European countries, we find that personal income taxes substantially mute profit shifting to low–corporate tax countries. This effect is stronger if the parent country has strict economic substance requirements to curb tax avoidance. Our results show important interactions between personal and corporate income taxes that shape multinationals’ profit-shifting decisions.

Tax Depreciation and Investment Decisions: Evidence from the Leasing Sector 

This paper examines the investment response of finance lease firms to a change in tax depreciation rules. Using an exogenous shock in Germany, our results suggest that finance lease companies, the only organisations affected by such a change, reduce their investments following the abolition of a beneficial and long-standing tax depreciation method. We provide evidence that the exposure of finance lease firms to regulatory requirements moderates the investment effect. Additional cross-sectional tests indicate a larger investment response for finance lease firms with a product portfolio specialised in mobile assets and, in particular, office and IT assets. Our findings add to the existing contributions on the effect of tax depreciation on investment decisions and to the limited literature looking into the effect of taxation on financial institutions.