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Government Policy and Ownership of Financial Assets

  • Kristian Rydqvist
  • Joshua Spizman
  • Ilya A. Strebulaev

Since World War II, direct stock ownership by households across the globe has largely been replaced by indirect stock ownership by financial institutions. We argue that tax policy is the driving force. Using long time-series from eight countries, we show that the fraction of household ownership decreases with measures of the tax benefits of holding stocks inside tax-deferred plans. This finding is important for policy considerations on effective taxation and for financial economics research on the long-term effects of taxation on corporate finance and asset prices.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 17522.

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Date of creation: Oct 2011
Date of revision:
Publication status: published as Government Policy and Ownership of Financial Assets, 2014 Journal of Financial Economics 111, 70-85 (with Kristian Rydqvist and Joshua Spizman)
Handle: RePEc:nbr:nberwo:17522
Note: AP CF PE
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