search query: @author Devereux, M. / total: 8
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| Author: | Devereux, M. |
| Title: | Tax asymmetries, the cost of capital and investment: some evidence from United Kingdom panel data |
| Journal: | Economic Journal
1989 : VOL. 99:395, p. 103-112 |
| Index terms: | TAXATION UNITED KINGDOM CORPORATION TAX MANUFACTURING INDUSTRY CAPITAL COSTS |
| Language: | eng |
| Abstract: | The impact of inter-company as well as temporal variation in corporate taxation on companies' investment decisions is investigated. A methodology is presented for measuring the cost of capital which takes account for tax asymmetries and allows tax rates to change. Applying this methodology to a sample of 187 United Kingdom quoted manufacturing companies over the period 1971 to 1987 it could be demonstrated that there was very large cross-section variation in the cost of capital over that period, partly as a result of tax asymmetries. These estimates of the cost of capital had a significant impact on investment. However, this effect appears small relative to time-series variation. The total impact of taxation on investment is discussed. |
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