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Dividend Taxes and the Allocation of Capital: Comment

Author

Listed:
  • Laurent Bach

    (ESSEC Business School)

  • Antoine Bozio

    (PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement)

  • Arthur Guillouzouic

    (PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement)

  • Clément Malgouyres

    (PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement)

Abstract

Boissel and Matray (2022) find that investment increased after 2013 in French firms facing higher dividend taxes. We identify an alteration in the code plotting the event study of the effect of this reform on investment. Using identical data and removing this alteration, we find differential pre-trends between treated and control firms. We also establish that the controls referred to as "size growth," used in all the difference-in-difference specifications, effectively are controls for lagged investment, i.e., the main outcome variable. Removing such controls attenuates differential pre-trends but leaves no clear event study evidence of a positive effect of dividend taxation on investment.

Suggested Citation

  • Laurent Bach & Antoine Bozio & Arthur Guillouzouic & Clément Malgouyres, 2023. "Dividend Taxes and the Allocation of Capital: Comment," Post-Print halshs-04346639, HAL.
    • Handle: RePEc:hal:journl:halshs-04346639
    DOI: 10.1257/aer.20221432
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    Cited by:

    1. Bruns, Stephan & Herwartz, Helmut & Ioannidis, John P.A. & Islam, Chris-Gabriel & Raters, Fabian H. C., 2023. "Statistical reporting errors in economics," MetaArXiv mbx62, Center for Open Science.

    More about this item

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • G31 - Financial Economics - - Corporate Finance and Governance - - - Capital Budgeting; Fixed Investment and Inventory Studies
    • G35 - Financial Economics - - Corporate Finance and Governance - - - Payout Policy
    • H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies
    • H32 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Firm

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