IDEAS home Printed from https://ideas.repec.org/a/mul/je8794/doi10.1429-20829y2005i3p435-460.html
   My bibliography  Save this article

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

Author

Listed:
  • Elena Gennari
  • Giuliana Maurizi
  • Alessandra Staderini

Abstract

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

Suggested Citation

  • Elena Gennari & Giuliana Maurizi & Alessandra Staderini, 2005. "Estimating the Reactivity of Investment to Tax Changes: The Case of Italy in the Nineties," Politica economica, Società editrice il Mulino, issue 3, pages 435-460.
    • Handle: RePEc:mul:je8794:doi:10.1429/20829:y:2005:i:3:p:435-460
    as

    Download full text from publisher

    File URL: https://www.rivisteweb.it/download/article/10.1429/20829
    Download Restriction: Access to full text is restricted to subscribers
    File URL: https://www.rivisteweb.it/doi/10.1429/20829
    Download Restriction: no
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. 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.

    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.

    We have no bibliographic references for this item. You can help adding them by using 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://www.rivisteweb.it/ .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.