Measuring the Impact of Taxation on Investment and Financing Decisions

22 Pages Posted: 14 Jun 2002

See all articles by Ulrich Schreiber

Ulrich Schreiber

University of Mannheim - Department of Business Administration and Taxation; Centre for European Economic Research (ZEW)

Christoph Spengel

Centre for European Economic Research (ZEW)

Lothar Lammersen

affiliation not provided to SSRN

Abstract

Effective tax rates are a useful tool for policy makers as well as for business managers who might demand condensed but sophisticated information on investment tax burdens. Our paper discusses the measurement of the effective tax rate on profitable investment, i.e., investment that generates an economic rent. Based on an approach presented by Devereux and Griffith, we develop a standard measure of the effective average tax rate. This measure is directly connected with the widely used effective marginal tax rate. The measure uses a comparison with the statutory tax rate to indicate whether or not an investment is tax advantaged.

JEL Classification: H24, H25, K34, M21

Suggested Citation

Schreiber, Ulrich and Spengel, Christoph and Lammersen, Lothar, Measuring the Impact of Taxation on Investment and Financing Decisions. Available at SSRN: https://ssrn.com/abstract=313562 or http://dx.doi.org/10.2139/ssrn.313562

Ulrich Schreiber (Contact Author)

University of Mannheim - Department of Business Administration and Taxation ( email )

D-68131 Mannheim
Germany
+49 621 181 1718 (Phone)
+49 621 181 1716 (Fax)

Centre for European Economic Research (ZEW)

D-68161 Mannheim
Germany

Christoph Spengel

Centre for European Economic Research (ZEW) ( email )

D-68161 Mannheim
Germany

Lothar Lammersen

affiliation not provided to SSRN

No Address Available

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