Empirical Tax Research
Taxation and Investment Decisions
Taxation and Payout Policies
Single Authored, Job Market Paper
Latest Draft: August 2020
Accepted at the EAA Doctoral Colloquium in 2020
This paper examines the response of private firms and their shareholders to a dividend tax increase, which affects only a small group of shareholders. Using an exogenous shock in Germany, my results suggest that firms do not adjust their payout policy but corporate minority shareholders, the only ones affected by the increase in shareholder taxes, reduce their minority stakes in private firms after the dividend tax reform. Additional cross-sectional tests indicate a higher shareholder response, if corporate minority shareholders are financially distressed, own a minority stake in a firm with a high dividend payout and a majority shareholder, and do not belong to the same group as the firm in which they own a minority stake. My findings add to the very limited literature on the effects of dividend taxes on payout decisions of private firms and reactions of their shareholders.
Tax Depreciation and Investment Decisions: Evidence from the Leasing Sector
with Andreas Oestreicher
Latest Draft: November 2020
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.
The Effect of Public Country-by-Country Reporting on Real Activities of EU Banks
Latest Draft: November 2020
In this paper, I examine the effects of mandatory public Country-by-Country Reporting (CbCR) disclosure requirements in the EU financial sector on banks’ real economic activities. Using the implementation of CbCR as an exogenous shock, I find that EU multinational banks decrease their tax avoidance activities, total assets, earning assets and the number of employees compared to EU domestic banks after CbCR disclosure requirements became effective in 2014. Cross-sectional tests reveal that the response of EU multinational banks prevails for those exposed to reputational concerns and detection risks. My findings add to the literature on the real effects of disclosure and supplements the emerging literature on the consequences of public CbCR in particular.
Corporate Tax Asymmetries, Investment Behaviour and Marginal Tax Rates
with Rebecca Höhl
funded by the German Research Foundation (DFG)
Latest Draft: January 2019
This paper aims to analyse the effect of tax loss treatment on investment behaviour. Using simulated marginal tax rates based on unconsolidated financial statement data and applying a new method to determine this tax burden measure, we test whether tax losses influence investment decisions. Based on panel data of European subsidiaries, we show that subsidiary’s losses have a positive impact on the investment stock from a tax perspective. The effect is statistically significant, even after various robustness checks.