The Evolution of Aggregate Stock Ownership - A Unified Explanation

59 Pages Posted: 26 Aug 2009

See all articles by Kristian Rydqvist

Kristian Rydqvist

State University of New York at Binghamton - School of Management; Centre for Economic Policy Research (CEPR); European Corporate Governance Institute (ECGI)

Joshua D. Spizman

Loyola Marymount University - Department of Finance

Ilya A. Strebulaev

Stanford University - Graduate School of Business; National Bureau of Economic Research

Date Written: July 2009

Abstract

Since World War II, direct stock ownership by households has largely been replaced by indirect stock ownership by financial institutions. We argue that tax policy is the driving force. Using long time-series from eight countries, we show that the fraction of household ownership decreases with measures of the tax benefits of holding stocks inside a pension plan. This finding is important for policy considerations on effective taxation and for financial economics research on the long-term effects of taxation on corporate finance and asset prices.

Keywords: Bracket creep, capital gains tax, Income tax, Inflation, Pension funds, stock ownership

JEL Classification: G10, G20, H22, H30

Suggested Citation

Rydqvist, Kristian and Spizman, Joshua D. and Strebulaev, Ilya A., The Evolution of Aggregate Stock Ownership - A Unified Explanation (July 2009). CEPR Discussion Paper No. DP7356, Available at SSRN: https://ssrn.com/abstract=1461985

Kristian Rydqvist (Contact Author)

State University of New York at Binghamton - School of Management ( email )

P.O. Box 6015
Binghamton, NY 13902-6015
United States
607-777-2673 (Phone)
607-777-4422 (Fax)

Centre for Economic Policy Research (CEPR)

London
United Kingdom

European Corporate Governance Institute (ECGI) ( email )

c/o the Royal Academies of Belgium
Rue Ducale 1 Hertogsstraat
1000 Brussels
Belgium

Joshua D. Spizman

Loyola Marymount University - Department of Finance ( email )

Los Angeles, CA 90045
United States
(310) 338-2902 (Phone)

HOME PAGE: http://www.joshuaspizman.com

Ilya A. Strebulaev

Stanford University - Graduate School of Business ( email )

655 Knight Way
Stanford, CA 94305-5015
United States

HOME PAGE: http://faculty-gsb.stanford.edu/strebulaev/

National Bureau of Economic Research ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
3
Abstract Views
815
PlumX Metrics