Tax Reforms and Investment: A Cross-Country Comparison

47 Pages Posted: 30 Jun 2000 Last revised: 17 Mar 2008

See all articles by Jason G. Cummins

Jason G. Cummins

Brevan Howard Asset Management LLP

Kevin A. Hassett

American Enterprise Institute (AEI)

R. Glenn Hubbard

Columbia Business School - Finance and Economics; National Bureau of Economic Research (NBER)

Date Written: August 1995

Abstract

We use firm-level panel data to explore the extent to which fixed investment responds to tax reforms in 14 OECD countries. Previous studies have often found that investment does not respond to changes in the marginal cost of investment. We identify some of the factors responsible for this finding and employ an estimation procedure that sidesteps the most important of them. In so doing, we find evidence of statistically and economically significant investment responses to tax changes in 12 of the 14 countries.

Suggested Citation

Cummins, Jason Gustav and Hassett, Kevin A. and Hubbard, Robert Glenn, Tax Reforms and Investment: A Cross-Country Comparison (August 1995). NBER Working Paper No. w5232. Available at SSRN: https://ssrn.com/abstract=225296

Jason Gustav Cummins (Contact Author)

Brevan Howard Asset Management LLP ( email )

London, SW1Y 6XA
United Kingdom

Kevin A. Hassett

American Enterprise Institute (AEI) ( email )

1150 17th Street, N.W.
Washington, DC 20036
United States
202.862.7157 (Phone)
202.862.7177 (Fax)

Robert Glenn Hubbard

Columbia Business School - Finance and Economics ( email )

3022 Broadway
New York, NY 10027
United States

HOME PAGE: http://www.gsb.columbia.edu/faculty/ghubbard

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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