IDEAS home Printed from https://ideas.repec.org/a/oup/qjecon/v93y1979i3p411-432..html
   My bibliography  Save this article

Corporate Financial Policy and Taxation in a Growing Economy

Author

Listed:
  • Martin Feldstein
  • Jerry Green
  • Eytan Sheshinski

Abstract

I. A model of financial equilibrium, 412.—IL Effects of changes in the profit tax rate, 418.—III. Effects of changes in the taxation of retained earnings, 423.—IV. The nonneutrality of the corporate income tax, 427.—V. Conclusion, 430.

Suggested Citation

  • Martin Feldstein & Jerry Green & Eytan Sheshinski, 1979. "Corporate Financial Policy and Taxation in a Growing Economy," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 93(3), pages 411-432.
    • Handle: RePEc:oup:qjecon:v:93:y:1979:i:3:p:411-432.
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.2307/1883166
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

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

    Other versions of this item:

    References listed on IDEAS

    as
    1. Robin Marris & Adrian Wood (ed.), 1971. "The Corporate Economy," Palgrave Macmillan Books, Palgrave Macmillan, number 978-1-349-01110-0, October.
    2. Martin Feldstein, 1983. "Inflation, Income Taxes, and the Rate of Interest: A Theoretical Analysis," NBER Chapters, in: Inflation, Tax Rules, and Capital Formation, pages 28-43, National Bureau of Economic Research, Inc.
    3. Martin Feldstein & Jerry Green & Eytan Sheshinski, 1983. "Inflation and Taxes in a Growing Economy with Debt and Equity Finance," NBER Chapters, in: Inflation, Tax Rules, and Capital Formation, pages 44-60, National Bureau of Economic Research, Inc.
    4. John Lintner, 1964. "Optimal Dividends and Corporate Growth under Uncertainty," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 78(1), pages 49-95.
    5. Martin Feldstein & Lawrence Summers, 1977. "Is the Rate of Profit Falling?," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 8(1), pages 211-228.
    6. Tobin, James, 1969. "A General Equilibrium Approach to Monetary Theory," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 1(1), pages 15-29, February.
    7. R. G. Penner, 1964. "A Note on Portfolio Selection and Taxation," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 31(1), pages 83-86.
    8. Alan J. Auerbach, 1979. "Wealth Maximization and the Cost of Capital," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 93(3), pages 433-446.
    9. Robert M. Solow, 1971. "Some Implications of Alternative Criteria for the Firm," Palgrave Macmillan Books, in: Robin Marris & Adrian Wood (ed.), The Corporate Economy, chapter 10, pages 318-342, Palgrave Macmillan.
    10. Stiglitz, Joseph E., 1973. "Taxation, corporate financial policy, and the cost of capital," Journal of Public Economics, Elsevier, vol. 2(1), pages 1-34, February.
    11. Myers, Stewart C., 1977. "Determinants of corporate borrowing," Journal of Financial Economics, Elsevier, vol. 5(2), pages 147-175, November.
    Full references (including those not matched with items on IDEAS)

    Citations

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


    Cited by:

    1. Martin Feldstein, 1983. "Inflation, Tax Rules, and the Accumulation of Residential and Nonresidential Capital," NBER Chapters, in: Inflation, Tax Rules, and Capital Formation, pages 81-100, National Bureau of Economic Research, Inc.
    2. Martin Feldstein, 1983. "Inflation, Tax Rules, and Investment: Some Econometric Evidence," NBER Chapters, in: Inflation, Tax Rules, and Capital Formation, pages 243-286, National Bureau of Economic Research, Inc.
    3. Jongmoo Jay Choi, 1988. "Debt Financing and the Cost of Capital in the Neoclassical Investment Model," The American Economist, Sage Publications, vol. 32(1), pages 19-23, March.
    4. Martin Feldstein, 1983. "Inflation, Tax Rules, and the Stock Market," NBER Chapters, in: Inflation, Tax Rules, and Capital Formation, pages 199-220, National Bureau of Economic Research, Inc.
    5. Uzi Yaari & Frank J. Fabozzi, 1985. "Why Ira And Keogh Plans Should Avoid Growth Stocks," Journal of Financial Research, Southern Finance Association;Southwestern Finance Association, vol. 8(3), pages 203-216, September.
    6. Feldstein, Martin & Green, Jerry, 1983. "Why Do Companies Pay Dividends?," American Economic Review, American Economic Association, vol. 73(1), pages 17-30, March.
    7. Alan J. Auerbach, 1979. "Wealth Maximization and the Cost of Capital," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 93(3), pages 433-446.
    8. Jeffrey I. Bernstein & M. Ishaq Nadiri, 1982. "Financing and Investment in Plant and Equipment and Research and Development," NBER Working Papers 1017, National Bureau of Economic Research, Inc.
    9. Auerbach, Alan J., 1979. "Share valuation and corporate equity policy," Journal of Public Economics, Elsevier, vol. 11(3), pages 291-305, June.
    10. Martin Feldstein & David Hartman, 1979. "The Optimal Taxation of Foreign Source Investment Income," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 93(4), pages 613-629.
    11. Srđan Đinđić, 2013. "Taxation And Forms Of Organising Business Activities," Economic Annals, Faculty of Economics and Business, University of Belgrade, vol. 58(196), pages 133-156, January –.
    12. Ghada Abbas, 2006. "Gestion de la dette publique et lissage des taux d’imposition," CAE Working Papers 46, Aix-Marseille Université, CERGAM.
    13. Serge Nadeau & Robert P. Strauss, 1991. "Tax Policies and the Real and Financial Decisions of the Firm: the Effects of the Tax Reform Act of 1986," Public Finance Review, , vol. 19(3), pages 251-292, July.
    14. Filoso, Valerio, 2010. "The Corporate Income Tax: An Entrepreneurial Perspective," MPRA Paper 42967, University Library of Munich, Germany.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Joel B. Slemrod, 1983. "A General Equilibrium Model of Taxation with Endogenous Financial Behavior," NBER Chapters, in: Behavioral Simulation Methods in Tax Policy Analysis, pages 427-458, National Bureau of Economic Research, Inc.
    2. Sinn, Hans-Werner, 1991. "The non-neutrality of inflation for international capital movements," European Economic Review, Elsevier, vol. 35(1), pages 1-22, January.
    3. Darrel Cohen & Kevin Hassett & R. Glenn Hubbard, 1999. "Inflation and the User Cost of Capital: Does Inflation Still Matter?," NBER Chapters, in: The Costs and Benefits of Price Stability, pages 199-234, National Bureau of Economic Research, Inc.
    4. William M. Gentry & R. Glenn Hubbard, 1998. "Fundamental Tax Reform and Corporate Financial Policy," NBER Working Papers 6433, National Bureau of Economic Research, Inc.
    5. Martin Feldstein, 1983. "Fiscal Policies, Inflation, and Capital Formation," NBER Chapters, in: Inflation, Tax Rules, and Capital Formation, pages 61-80, National Bureau of Economic Research, Inc.
    6. Aissata Boubacar Moumouni, 2020. "Investment Sensitivity to Inter-enterprises Payment Deadlines," AMSE Working Papers 1938, Aix-Marseille School of Economics, France.
    7. Richard W. Kopcke, 1991. "Economic rents, the demand for capital, and financial structure," Working Papers 91-8, Federal Reserve Bank of Boston.
    8. Richard W. Kopcke, 1992. "Tobin's Q, economic rents, and the optimal stock of capital," Working Papers 92-3, Federal Reserve Bank of Boston.
    9. Auerbach, Alan J, 1979. "Inflation and the Choice of Asset Life," Journal of Political Economy, University of Chicago Press, vol. 87(3), pages 621-638, June.
    10. Serge Nadeau & Robert P. Strauss, 1991. "Tax Policies and the Real and Financial Decisions of the Firm: the Effects of the Tax Reform Act of 1986," Public Finance Review, , vol. 19(3), pages 251-292, July.
    11. Auerbach, Alan J., 2002. "Taxation and corporate financial policy," Handbook of Public Economics, in: A. J. Auerbach & M. Feldstein (ed.), Handbook of Public Economics, edition 1, volume 3, chapter 19, pages 1251-1292, Elsevier.
    12. Auerbach, Alan J., 1979. "Share valuation and corporate equity policy," Journal of Public Economics, Elsevier, vol. 11(3), pages 291-305, June.
    13. Aissata Boubacar Moumouni, 2020. "Investment Sensitivity to Inter-enterprises Payment Deadlines," Working Papers hal-02889436, HAL.
    14. Patric H. Hendershott, 1979. "The Decline in Aggregate Share Values: Inflation, Taxation, Risk and Profitability," NBER Working Papers 0370, National Bureau of Economic Research, Inc.
    15. Robert L. McDonald & Naomi Soderstrom, 1986. "Dividend and Share Changes: Is There a Financing Hierarchy?," NBER Working Papers 2029, National Bureau of Economic Research, Inc.
    16. Mihir A. Desai & James R. Hines, Jr., 1999. "Excess Capital Flows and the Burden of Inflation in Open Economies," NBER Chapters, in: The Costs and Benefits of Price Stability, pages 235-272, National Bureau of Economic Research, Inc.
    17. Aybar, Bülent & Thanakijsombat, Thanarerk, 2015. "Financing decisions and gains from cross-border acquisitions by emerging-market acquirers," Emerging Markets Review, Elsevier, vol. 24(C), pages 69-80.
    18. van de Klundert, Theo & Smulders, Sjak, 1995. "Strategies for Growth in a Macroeconomic Setting," The Manchester School of Economic & Social Studies, University of Manchester, vol. 63(4), pages 388-411, December.
    19. José María Serena & Ricardo Sousa, 2017. "Does exchange rate depreciation have contractionary effects on firm-level investment?," BIS Working Papers 624, Bank for International Settlements.
    20. Julia, Knolle, 2014. "An Empirical Comparison of Interest and Growth Rates," MPRA Paper 59520, University Library of Munich, Germany.

    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:qjecon:v:93:y:1979:i:3:p:411-432.. 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.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with 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/qje .

    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.