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Discussion of “Performance Evaluation and Corporate Income Taxes in a Sequential Delegation Setting”

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  • Madhav V. Rajan

    (Stanford University)

Abstract

Baldenius and Ziv (2003), emphasize the role played by corporate taxes in the context of a multi-period setting that features project selection and incentive issues. In this discussion, I employ a parametric example to illustrate the intuition behind their findings, as well as to delineate their incremental contribution and to speculate on the robustness of the results. I also highlight the differences between the residual income framework employed in their paper and traditional models of agency.

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  • Madhav V. Rajan, 2003. "Discussion of “Performance Evaluation and Corporate Income Taxes in a Sequential Delegation Setting”," Review of Accounting Studies, Springer, vol. 8(2), pages 311-319, June.
    • Handle: RePEc:spr:reaccs:v:8:y:2003:i:2:d:10.1023_a:1024425814902
    DOI: 10.1023/A:1024425814902
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    References listed on IDEAS

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    1. Stefan Reichelstein, 1997. "Investment Decisions and Managerial Performance Evaluation," Review of Accounting Studies, Springer, vol. 2(2), pages 157-180, June.
    2. Maydew, EL, 1997. "Tax-induced earnings management by firms with net operating losses," Journal of Accounting Research, John Wiley & Sons, Ltd., vol. 35(1), pages 83-96.
    3. Sunil Dutta & Stefan Reichelstein, 2002. "Controlling Investment Decisions: Depreciation- and Capital Charges," Review of Accounting Studies, Springer, vol. 7(2), pages 253-281, June.
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