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Asymmetric Taxation and the Theory of the Competitive Firm under Uncertainty

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  • E. Appelbaum
  • E. Katz

Abstract

This paper examines the implications of the asymmetries in the tax treatment of corporate profits and losses for the theory of the competitive firm under uncertainty. It is shown that the tax asymmetry introduces a curvature into the firm's target function which affects its behavior in the short run. In long-run industry equilibrium, however, most of the effects disappear at the firm level, but still remain at the industry level.

Suggested Citation

  • E. Appelbaum & E. Katz, 1987. "Asymmetric Taxation and the Theory of the Competitive Firm under Uncertainty," Canadian Journal of Economics, Canadian Economics Association, vol. 20(2), pages 357-369, May.
    • Handle: RePEc:cje:issued:v:20:y:1987:i:2:p:357-69
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    References listed on IDEAS

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    1. Appelbaum, Elie & Katz, Eliakim, 1996. "Corporate taxation, incumbency advantage and entry," European Economic Review, Elsevier, vol. 40(9), pages 1817-1828, December.
    2. Michel Poitevin, 1998. "Effects of the Fiscal Treatment of Tax Losses on the Efficiency of Markets and the Incidence of Mergers," CIRANO Working Papers 98s-33, CIRANO.
    3. Elie Appelbaum, 2002. "Union Contracts and the Firm's Financial Structure," Working Papers 2002_12, York University, Department of Economics.
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    Cited by:

    1. Michel Poitevin, 1998. "Effects of the Fiscal Treatment of Tax Losses on the Efficiency of Markets and the Incidence of Mergers," CIRANO Working Papers 98s-33, CIRANO.
    2. Elie Appelbaum, 2002. "Union Contracts and the Firm's Financial Structure," Working Papers 2002_12, York University, Department of Economics.
    3. Appelbaum, Elie & Katz, Eliakim, 1996. "Corporate taxation, incumbency advantage and entry," European Economic Review, Elsevier, vol. 40(9), pages 1817-1828, December.

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