As Uncertain as Taxes: Taxing Entrepreneurs in France

41 Pages Posted: 29 Oct 2019

See all articles by Charles Boissel

Charles Boissel

HEC Paris - Finance Department

Adrien Matray

Princeton University

Date Written: October 25, 2019


We exploit one of the largest reform of dividend taxation in France in 2012 to estimate the effect of an increase in dividend tax rate on corporate policies, using administrative data covering the universe of firms and employees. In a difference-in-difference setting, we find that exposed firms swiftly cut dividend payments, both at the extensive and intensive margin, with an implied elasticity of -0:6. We find that treated firms build up considerable amount of cash reserves after reducing their dividend payment but do not change their investment policies. We report a precisely estimated null effect of dividend taxes on investment rate, with an implied elasticity around 0.04.

Suggested Citation

Boissel, Charles and Matray, Adrien, As Uncertain as Taxes: Taxing Entrepreneurs in France (October 25, 2019). Proceedings of Paris December 2019 Finance Meeting EUROFIDAI - ESSEC, Available at SSRN: or

Charles Boissel (Contact Author)

HEC Paris - Finance Department ( email )

1 rue de la Liberation
Jouy-en-Josas Cedex, 78351

Adrien Matray

Princeton University ( email )

22 Chambers Street
Princeton, NJ 08544-0708
United States

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