IDEAS home Printed from
MyIDEAS: Log in (now much improved!) to save this article

Estimating the Reactivity of Investment to Tax Changes: The Case of Italy in the Nineties

Listed author(s):
  • Gennari Elena
  • Maurizi Giuliana
  • Staderini Alessandra
Registered author(s):

    In this paper we estimate a model investigating the impact of the user cost on investment, concentrating on the role played by the tax component. We use a methodology introduced by Cummins, Hassett and Hubbard (1994) that focuses on years of major tax changes. Italy represents an interesting case for the application of this methodology, having experienced some relevant tax changes to promote investment in the Nineties. The evaluation is carried out for the period 1994-2001 on firm level data of a panel of almost 3,000 firms. The estimation points at a reactivity of investment to the user cost of capital of -0.3 and at an elasticity of 0.5, in line with previous research work. Results also highlight that tax variables may significantly contribute to movements in investment, other fundamentals being equal

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

    File URL:
    Download Restriction: Access to full text is restricted to subscribers

    File URL:
    Download Restriction: no

    As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

    Article provided by Società editrice il Mulino in its journal Politica economica.

    Volume (Year): (2005)
    Issue (Month): 3 ()
    Pages: 435-460

    in new window

    Handle: RePEc:mul:je8794:doi:10.1429/20829:y:2005:i:3:p:435-460
    Contact details of provider: Web page:

    No references listed on IDEAS
    You can help add them by filling out this form.

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    When requesting a correction, please mention this item's handle: RePEc:mul:je8794:doi:10.1429/20829:y:2005:i:3:p:435-460. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ()

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.