IDEAS home Printed from https://ideas.repec.org/a/oup/oxecpp/v68y2016i2p465-483..html
   My bibliography  Save this article

Tax incentives and investment in the UK

Author

Listed:
  • Gavin Wallis

Abstract

Business investment is one of the most volatile components of demand. Whether or not tax policy can be used to boost investment is an age-old policy question. After documenting both how tax policy has changed since 1980 and the impact of these changes on the cost of capital, this paper investigates that question using a UK dataset. The paper shows that tax changes have had large impacts on the user cost of capital, but that estimates of the user cost elasticity imply quite small impacts on the long-run capital stock. Adopting an alternative experimental approach for the first time using UK data shows large impacts of taxation on investment in periods following the announcement of major reforms.

Suggested Citation

  • Gavin Wallis, 2016. "Tax incentives and investment in the UK," Oxford Economic Papers, Oxford University Press, vol. 68(2), pages 465-483.
    • Handle: RePEc:oup:oxecpp:v:68:y:2016:i:2:p:465-483.
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1093/oep/gpv090
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Peter Goodridge & Jonathan Haskel, 2023. "Accounting for the slowdown in UK innovation and productivity," Economica, London School of Economics and Political Science, vol. 90(359), pages 780-812, July.
    2. Peter Goodridge & Jonathan Haskel & Gavin Wallis, 2018. "Accounting for the UK Productivity Puzzle: A Decomposition and Predictions," Economica, London School of Economics and Political Science, vol. 85(339), pages 581-605, July.
    3. Chang, Kai & Wan, Qiong & Lou, Qichun & Chen, Yili & Wang, Weihong, 2020. "Green fiscal policy and firms’ investment efficiency: New insights into firm-level panel data from the renewable energy industry in China," Renewable Energy, Elsevier, vol. 151(C), pages 589-597.
    4. Isabel Busom & Beatriz Corchuelo & Ester Martínez-Ros, 2017. "Participation inertia in R&D tax incentive and subsidy programs," Small Business Economics, Springer, vol. 48(1), pages 153-177, January.
    5. P Sivashankar & RMPS Rathnayake & Maneka Jayasinghe & Christine Smith, 2017. "Incidence of value added taxation on inequality: Evidence from Sri Lanka," Discussion Papers in Economics economics:201704, Griffith University, Department of Accounting, Finance and Economics.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:oup:oxecpp:v:68:y:2016:i:2:p:465-483.. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Oxford University Press (email available below). General contact details of provider: https://academic.oup.com/oep .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.