IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Log in (now much improved!) to save this paper

The Impact of Dividend Taxation on Dividends and Investment: New Evidence Based on a Natural Experiment

Listed author(s):
  • Seppo Kari

    (Government Institute for Economic Research)

  • Hanna Karikallio

    (Pellervo Economic Research Institute)

  • Jari Vainiomäki

    (School of Management, University of Tampere)

Registered author(s):

    There is a lack of clear evidence of the ways in which dividend taxation affects dividend distributions and investment since the evidence is based mainly on the behaviour of large listed companies. This paper utilises a large register-based panel data set, where the vast majority of firms are small and medium-sized enterprises, to examine the responses to the Finnish dividend tax increase of 2005. This reform creates a useful opportunity to measure enterprise behaviour, since it involves exogenous variation in the tax treatment of different types of firms. The results, based on differences-in-differences estimation and matching methods, indicate that ividends declined somewhat in closely held corporations that faced a tax increase, perhaps for timing reasons, while investments did not decline. These findings are more in line with the new rather than the old view of dividend taxation.

    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: http://urn.fi/urn:isbn:978-951-44-7814-7
    File Function: First version, 2009
    Download Restriction: no

    Paper provided by University of Tampere, School of Management, Economics in its series Working Papers with number 0973.

    as
    in new window

    Length: 35 pages
    Date of creation: Aug 2009
    Handle: RePEc:tam:wpaper:0973
    Contact details of provider: Web page: http://www.uta.fi/jkk/en/

    More information through EDIRC

    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:tam:wpaper:0973. 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: (Markku Konttinen)

    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.