dividend taxes corporate investment and q abstract taxes on corporate distributions have traditionally been regarded as a double tax on corporate income this view implies that while the total effective tax rate on corporate source income affects real economic decisions the distribution of this tax burden between the shareholders and the corporation is irrelevant recent research has suggested an alternative to this traditional view one explanation of why firms in the united states pay dividends in spite of the heavy tax liabilities associated with this form of distribution is that the stock market capitalizes the tax payments associated with corporate distributions this capitalization leaves investors indifferent at the margin between a corporation s decision to pay out dividends or to retain earnings this alternative view holds that while changes in the dividend tax rate will affect shareholder wealth they will have no impact on corporate investment decisions this paper develops econometric tests which distinguish between these two views of dividend taxation by extending tobin s q theory of investment to incorporate taxes at both the corporate and personal levels the implications of each view for corporate investment decisions can be derived the competing views may be tested by comparing the performance of investment equations estimated under each theory s predictions british time series data are particularly appropriate for testing hypotheses about dividend taxes because of the substantial postwar variation in effective tax rates on corporate distributions the econometric results suggest that dividend taxes have important effects on investment decisions

taxation of uncertain business profits private risk markets and optimal allocation of risk abstract in this paper we explore what happens if the government bears some of the risk through a profit tax when the risk sharing in the venture capital market is incomplete due to non observability of effort and moral hazard if the external equity investors can enforce exclusive contracts with the entrepreneurs the risk relief through a profit tax will lead to too much insurance and too low effort as compared with a second best optimal solution bond and devereux bond s r and devereux m p 1995 on the design of a neutral business tax under uncertainty journal of public economics 58 57 71 show that a proportional profit tax would be neutral in the absence of moral hazard in the presence of moral hazard we demonstrate that the tax may affect the risk shifting through the market in which case the premise for the neutrality result will no longer hold

taxation of outbound direct investment economic principles and tax policy considerations this paper reviews economic principles for optimality of the taxation of international profit from both a global and national perspective it argues that for traditional systems based on the residence of the investor or the source of the income nothing less than full harmonisation across countries can achieve global optimality the conditions for national optimality are more difficult to identify but are most likely to imply source based taxation however source based taxation requires an allocation of the profits of multinational companies to individual jurisdictions this is not only very difficult in practice but in some cases is without any conceptual foundation the taxation of interest income on a residence basis is also hard to justify if the aim of the tax system is to tax only the income arising from economic activity in a given country

s based taxation under default risk abstract this article studies the characteristics of a s based tax system under default risk in particular we show that its neutrality properties depend on whether debt is protected or unprotected in the former case this system is neutral in the latter case where default timing is optimally chosen by shareholders the s based system is neutral with respect to real decisions only if the firm s and the lender s tax rate are equal however the shareholders decision to default is always distorted

depreciation rules and value invariance with extractive firms the application of samuelson s theorem on value invariance to the case of intertemporally optimizing firms is shown to require a judiciously chosen economic depreciation formula which depends on both current stock and current flow variables in order to prevent the firms from changing their actions in the face of the tax regime we illustrate by deriving depreciation rules which achieve non distortingness of actions and value invariance for resource extracting firms

identifying the warm glow effect in contingent valuation abstract this paper reports the results from a contingent valuation study designed to investigate the influence of warm glow in willingness to pay wtp responses interindividual differences in warm glow motivation are measured through a factor analysis performed on a list of attitudinal items the reported wtp measures fail to pass the scope test both socioeconomic variables and motivational factor scores are significant in the explanation of the individual wtp measures we compute cold wtp measures by taking out the effect of the warm glow motivation these cold measures satisfy both the scope test and hausman s adding up property

neutral taxation under uncertainty abstract the analogs under uncertainty of two well known certainty results are derived first if there are timing differences between tax payments and accruals neutrality is preserved if the resulting tax credits or liabilities are carried forward at the risk free interest rate provided that tax credits and liabilities are sure to be redeemed eventually second the invariance of asset valuations with respect to the rate of income tax at a given pre tax interest rate proved by johansson and samuelson under certainty can be extended to cover the case of uncertainty given analogous ceteris paribus conditions

irreversible investment and endogenous financing abstract we evaluate the effects of corporate taxation on firms investment and financing choices we focus on how the asymmetry of the corporate tax imperfect loss carry overs endogenous financing with credit constraints and different degrees of investment irreversibility affect both incremental investment and entry decisions we find that as long as capital can be financed with debt at the margin the tax distortions on the marginal investment decision are small this is particularly so if the technology is flexible in contrast the tax distortions on the entry decision are substantial the ability of firms to carry over their losses and choose their financial structure endogenously are important for reducing both types of distortions

the influence factors on choice behavior regarding green products based on the theory of consumption values abstract this study applies the theory of consumption values to determine the influence factors on consumer choice behavior regarding green products and examines whether there are significant differences in consumption values and choice behavior between consumers with different outlooks on environmental concerns one way analysis of variance and multiple regression is used to assess data collected by a questionnaire survey the results indicate that consumers with high environmental concern support green products more and show greater readiness to choose them this study concludes that the main influence factors on consumer choice behavior regarding green products include psychological benefit desire for knowledge novelty seeking and specific conditions and do not include functional values price and quality this study contributes to preliminary but vital insights in effective promotion of green products

some additional results on investment risk taking and full loss offset corporate taxation with interest deductibility it is argued that a full loss offset corporate tax with interest deductibility may reduce risk taking in that entrepreneurs might decrease the amount of investment made in risky projects with higher corporate tax rates unlike previous results in the literature production functions with decreasing returns to scale and the possibility of equity financing of capital investment are allowed a corporate tax that falls in part on the returns of equity owners or entrepreneurs can under certain conditions reduce risk taking if the government taxes only risk then a corporate tax with a full loss offset can encourage investment in risky projects

taxes inflation and the durability of capital the choice of capital durability is affected by the rate of inflation because nominal depreciation deductions are based on historical cost rather than replacement cost this paper analyzes a model with competitive firms and demonstrates that an increase in the rate of inflation will lead to an increase in the durability of capital if the ratio of the nominal discount rate to the rate of depreciation exceeds a critical value however if this ratio is less than the crucial value this effect is reversed the effect of costs of adjustments on the crucial value is analyzed

consumer demand for green power and energy efficiency abstract this article examines reported willingness to pay for electric utility investments in renewable energy and energy efficiency resources using the results of deliberative polls conducted by electric utilities in texas 1 age education and salary tend to affect reported willingness to pay for utility investments in these resources intensive exposure to information about energy resource issues led to an increase in the number of respondents interested in paying a modest premium to support investments in both renewable energy resources and energy efficiency however average reported premiums actually declined following the polls as very high outlier responses moved to more reasonable values following the polls these results support the contention that informed dialogue about energy alternatives will result in broader interest in providing a modest level of support for these resources

splitting up value a critical review of residual income theories this paper deals with the notion of residual income which may be defined as the surplus profit that residues after a capital charge opportunity cost has been covered while the origins of the notion trace back to the 19th century in depth theoretical investigations and widespread real life applications are relatively recent and concern an interdisciplinary field connecting management accounting corporate finance and financial mathematics peasnell 1981 1982 peccati 1987 1989 1991 stewart 1991 ohlson 1995 arnold and davies 2000 young and o byrne 2001 martin petty and rich 2003 this paper presents both a historical outline of its birth and development and an overview of the main recent contributions regarding capital budgeting decisions production and sales decisions implementation of optimal portfolios forecasts of asset prices and calculation of intrinsic values a most recent theory the systemic value added approach also named lost capital paradigm provides a dierent denition of residual income consistent with arbitrage theory en folded in keynes s 1936 notion of user cost and forerun by pressacco and stucchi 1997 the theory has been formally introduced in magni 2000a b c 2001a b 2003 where its properties are thoroughly investigated as well as its relations with the standard theory two different lost capital metrics have been considered for value based management purposes by drukarczyk and schueler 2000 and young and o byrne 2001 this work illustrates the main properties of the two theories and their relations and provides a minimal guide to construction of performance metrics in the two approaches

a general proposition on the design of a neutral business tax abstract a simple and general means of levying a business tax that is neutral in the sense that it does not affect the firm s decisions at the margin is discussed in particular we analyze the effect of a business tax of our design on the investment decision of the firm the well known imputed income and immediate write off methods of levying a neutral business tax are found to be special cases of our general tax design the implication of our results is that a neutral pure profits tax can be levied without the informational difficulties of the imputed income method or the cash flow disadvantages of the immediate write off method

on the design of a neutral business tax under uncertainty this paper extends the results of boadway and bruce journal of public economics 1984 24 231 239 and fane journal of public economics 1987 33 95 105 to describe a tax on business profits which is neutral with respect to investment and wind up decisions and default outcomes under uncertainty and bankruptcy risk the tax base allows deductions for depreciation and the cost of finance but requires knowledge of neither true economic depreciation nor the firm s required rate of return we show that the tax must treat taxable profits and losses symmetrically and that the tax rate must be a known constant even in the special case when the tax base coincides with the economic rent earned in each period

factors influencing buying behaviour of green energy consumer green energy has gained significant research attention across the globe due to its ability to reduce environmental damage however for complete acceptance of green energy only government regulations are not enough the willingness to use green energy and contribute to the wellbeing of the environment should spring from within consumers such willingness may be developed by enhancing consumers perceived value of green energy however in order to do so it is necessary to assess existing levels of consumers perceived value towards green energy the present study develops a multidimensional green perceived value scale to measure existing levels of consumers perceived value the scale considers green perceived value as a multidimensional second order construct comprising functional value social value conditional value and emotional value dimensions such an attempt has not been made before which highlights the originality value of the present study the scale can be used to assess consumers perception towards green energy such information would help in formulating strategies that encourage consumers to voluntarily adopt green energy the study also reveals that it is not only the financial aspects that lead consumers to decide on adoption of green energy consumers are also driven by emotional and social considerations thus policy makers could formulate pro green energy programmes and mass messages that appeal to consumers sense of responsibility to voluntarily adopt green energy without having to rely on financial incentives researchers could examine the considered dimensions of the scale further with respect to other constructs related to consumer behaviour

distribution pricing based on yardstick regulation summary form only given as follows transmission and distribution t d pricing has been one of the keystones of the ongoing deregulation and privatization process in the power industry the electricity market has been established based on the assumption of open access and nondiscriminatory use of the t d assets as t d business remains as a monopoly it is necessary to provide economic regulation many papers have dealt with transmission pricing and certain maturity has been reached in this area but this is not true in the case of distribution services this paper focuses on the distribution pricing methods and suggests one that is currently under development in brazil this method is based on incremental costs derived from the aggregated expansion plan of a particular utility named model utility this utility was obtained by comparisons among the real distribution companies the method follows the fundamentals of the yardstick regulation

viewpoint innovations in the theory and practice of redistribution policy we present a survey of key results from second best optimal redistribution theory and their implications for tax transfer policy the core results include the corlett hague theorem the deaton conditions the production efficiency theorem the atkinson stiglitz theorem and the mirrlees saez characterization of the optimal non linear income tax system these have been augmented in recent years by optimal participation tax rates the implications of involuntary unemployment the use of unconventional instruments such as minimum wages in kind transfer and workfare and the optimal taxation of capital income and bequests l auteur presente un survol des principaux resultats theoriques de la redistribution optimale de second ordre et de leurs implications pour les politiques d imposition et de transferts les resultats fondamentaux incluent le theoreme de corlett hague les conditions de deaton les theoremes d efficacite en production le theoreme d atkinson stiglitz ainsi que la caracterisation du systeme optimal d imposition non lineaire du revenu a la mirrlees saez ces derniers resultats ont ete enrichis au cours des dernieres annees par certains autres portant sur les taux d imposition decoulant des allocations conditionnelles les implications du chomage involontaire l usage d instruments non conventionnels tels que le salaire minimum les transferts en nature le workfare ainsi que l imposition optimale des revenus du capital et des legs ces resultats sont exposes et leurs implications pour les politiques d imposition et de transferts sont discutees

the effect of oil price volatility on strategic investment in this paper we investigate how oil price volatility affects the strategic investment decisions of a large panel of us firms this paper uses key insights from the real options literature to develop a model of a company s strategic investment and shows how changes in oil price volatility can impact strategic investment decisions the model is estimated using recently developed generalized method of moment estimation techniques for panel data sets empirical results are presented to show that there is a u shaped relationship between oil price volatility and firm investment this is consistent with the predictions from the strategic growth options literature the results should be useful to decision makers investors managers policy makers and others who need to make strategic investment decisions in an uncertain world

corporate finance side of the q theory of investment abstract this paper presents a model of a firm under uncertainty in which the financial and investment decisions are simultaneously determined if profits are small relative to investment the firm finances a constant fraction of incremental investment by debt and the rest by retentions if profits are large relative to investment a constant fraction of marginal finance comes from debt and the rest from new shares in these two financing regimes a one to one relationship between optimal investment and q can be derived no such relation exists in the third and intermediate regime in which incremental investment is entirely debt financed

the development of renewable energy power in india which policies have been effective abstract the international energy agency has identified the development of renewable energy sources as a key element to mitigate climate change at the same time it has projected india to be the second largest contributor to the increase in global energy demand to 2035 india hence faces a significant challenge to ensure its energy security by diversifying its power generation mix in the wake of the creation of a green climate fund in cancun this paper studies empirically the effect of the introduction of the electricity act 2003 and the tariff policy 2006 as well as the implementation of feed in tariffs and minimum quotas on clean electricity sourcing on the development of grid connected renewable energy power in nine indian states over the period 2001 2009 results suggest that the passing of the tariff policy 2006 state level policies quantity based instruments and a greater participation of the private sector have played a key role in promoting the development of installed capacity from renewable energy power in the nine states of the sample

optimal investment portfolio in renewable energy the spanish case abstract this article presents a model for investing in renewable energies in the framework of the spanish electricity market in a way that risk is minimised for the investor while returns are maximised the model outlined here is based on an economic model for calculating cash flows intended to obtain the internal rate of return irr of the different energies being studied wind photovoltaic mini hydro and thermo electrical the irrs obtained are considered the returns on investments while their standard deviations are considered associated risks in order to minimise risk a comprehensive portfolio of investments is created that includes all of the available energies by means of a system of linear equations the solution of the linear system is graphically checked using the efficient frontier method for the different financing options several case studies within the renewable energies plan per is its spanish abbreviation that is in force in spain in the period 2005 2010 are analysed in order to illustrate the method as are other case studies using different types of financing helping us to reach the pertinent conclusions

green products an exploratory study on the consumer behaviour in emerging economies of the east abstract the recent years have witnessed a phenomenal change in quantum and pattern of consumption in the developing nations of the east ever increasing consumption is putting a strain on the environment the present work delves into understanding the relationship between environmental concerns and consumer choice behaviour in purchasing green products in the context of india being a large emerging economy in south east asia attempt has been made to examine the influence of consumption values on sustainable consumer behaviour across consumer segments with preferential green choice approach difference multiple linear regression analysis one way analysis of variance and other standard statistical analysis of the data collected through questionnaire survey have been done results indicate that price sensitivity is high regardless of their choice preference social value parameter being the dominant factor influences sustainable consumption behaviour adoption among the green preferential cluster consumption values differ significantly across consumers exhibiting different preference for products with and without green credentials being higher for those with green purchase or consumption experience or notion

a stochastic frontier analysis of financing constraints on investment is shown that investment under financing constraints can be modeled as a one sided deviation from a frictionless investment level and that effects of financing constraints can be identified and quantified by imposing a distributional assumption on the effects panel data on taiwanese manufacturing firms between 1989 and 1996 are used in the estimation it is found that 1 some of the sorting criteria used in the literature do not have significant and monotonic relationships with the degrees of financing constraint resulting in problematic sample separations and 2 the effects of financial liberalization in taiwan are such that the investment efficiency improved over time for a typical firm and the improvement was particularly large for smaller firms

renewable deployment in india financing costs and implications for policy india s ambitious goals for renewable energy raise many questions regarding the nature of investment required we conduct financial modeling of actual renewable projects in india and derive the following insights first the high cost of debt is the most pressing problem higher cost and inferior terms of debt in india may raise the cost of renewable energy by 24 32 compared to the u s second even if cost of debt goes down loan terms including short tenors and variable interest rates will become significant impediments given that they add 13 14 to the cost of renewable energy in india compared to the u s finally due to the high cost of debt policy lessons from the u s and europe which focus on finer instruments such as duration of revenue support revenue certainty investor risk perception and completion cost certainty are not likely to be as effective with potential impacts on the cost of renewable energy in the 3 11 range in fact we find that an interest rate subsidy which reduces the cost of debt reduces the overall subsidy burden by 13 16 this suggests that indian policymakers need to prioritize the provision of low cost long term debt and take a closer look at the successful efforts by china and brazil 2013 elsevier ltd

norms and economic motivation in the swedish green electricity market abstract the purpose of this paper is to provide an econometric analysis of the most important determinants of swedish households choice to pay a price premium for green electricity we draw on recent developments in the literature on integrating norm motivated behavior into neoclassical consumer theory and assume that individuals have a preference for keeping a self image as a morally responsible person consumer behavior in the green market place will then be heavily determined by how purchases of different goods affect this self image the analysis is based on postal survey responses from 655 swedish households which are analyzed within a binary choice econometric framework the results indicate that the impact of choosing green on the household budget largely influences the choice between green and brown electricity as does the degree of perceived personal responsibility for the issue and the felt ability to affect the outcome in a positive way we find limited support for the notion that perceptions about others behavior in general affect individual moral norms and ultimately expressed behavior but this is also complemented by the influence of explicit social influence the difficulty in observing others purchases makes it however difficult to distinguish between social and moral norms in the case of green electricity

beyond ecolabels what green marketing can learn from conventional marketing ecolabels have emerged as one of the main tools of green marketing although a great deal of effort has been invested in making them more effective and efficient the market share of ecolabelled products is still low partly because they have been addressed mainly to green consumers in a theoretical exposition of marketing theory we find that green marketing could learn from conventional marketing in discovering other means than labelling to promote green products examples include addressing a wider range of consumers working with the positioning strategies of price place and promotion and actively engaging in market creation

towards a contemporary approach for understanding consumer behaviour in the context of domestic energy use domestic sector energy use is increasing in the uk and currently accounts for 30 of total use policies of liberalised energy markets have allowed greater consumer choice but have not sought to reduce carbon emissions overall sales of energy efficiency products are rising but uk housing stock standards are poor and do not facilitate improved efficiency and further the sales of such products are influenced by their price thus the higher capital costs of products such as boilers and solar systems make them initially unattractive to consumers previous market based research into the adoption of energy efficiency products has often focused on single factors for example demographics this has limited the ability of policy makers to make informed decisions that address a broader range of factors such as individuals cognitive abilities values and attitudes as well as external factors such as social networks marketing and products and services this paper provides a wider critique of the theoretical base related to consumer behaviour product attributes and socio environmental theories that relate to energy use the aim of the paper is to draw together theories relevant to energy use in order to aid policy making in the broader context and to develop the discussion around integrated theories of consumer behaviour

conceptualizing the acceptance of wind and solar electricity drawing from research interviews and the academic literature this article conceptualizes the conditions that promote investor confidence and the social acceptance of wind and solar sources of electricity it explores the factors influencing the acceptance of commercial wind turbines in denmark and india and residential solar panels in germany and the united states the article begins by justifying its selection of case studies and explaining the methodology behind its research interviews and field visits it then summarizes some of the key findings in recent surveys of public attitudes and market acceptance concerning renewable energy with a focus on why some investors and communities reject wind and solar systems whereas others rapidly approve and adopt them the article proposes that acceptance has multiple dimensions socio political community and market that must be met holistically in order for investors and users to embrace renewable energy the article argues that acceptance hinges upon the prevalence of nine factors the lack of such factors creates environments where they are rejected the theory is tested against four case studies that explore the forces driving renewable energy in denmark germany india and the united states

social acceptance of renewable energy innovation an introduction to the concept this paper introduces the special issue on social acceptance of renewable energy innovation it is a collection of best papers presented at an international research conference held in tramelan switzerland in february 2006 while there are ambitious government targets to increase the share of renewable energy in many countries it is increasingly recognized that social acceptance may be a constraining factor in achieving this target this is particularly apparent in the case of wind energy which has become a subject of contested debates in several countries largely due to its visual impact on landscapes this paper introduces three dimensions of social acceptance namely socio political community and market acceptance factors influencing socio political and community acceptance are increasingly recognized as being important for understanding the apparent contradictions between general public support for renewable energy innovation and the difficult realization of specific projects the third dimension market acceptance has received less attention so far and provides opportunities for further research particularly from management scholars

taxation of asset income in the presence of a world securities market abstract this paper examines a capm model of world security prices in which governments recognize their ability to influence international security prices via their tax treatment of foreign and domestic investors in this model governments have the incentive to set tax rates such that investors tend to specialize in domestic securities and to restrict net capital flows between countries each country does this to increase the utility of domestic residents taking as given the tax policies of other governments but the net outcome is a reduction in world efficiency and likely a reduction in the utility of all investors

generalised r based and s based taxes under uncertainty this paper considers the relationship between two general neutral business tax structures which we label the firm tax and the shareholder tax the well known r based and s based cash flow taxes analysed by meade 1978 are special cases of these two taxes we demonstrate the neutrality of both taxes in the presence of uncertainty and characterise the tax rules required in the event of default and wind up our analysis provides the first proof of the neutrality of the s based cash flow tax and the allowance for corporate equity ace corporation tax under uncertainty we also discuss implementation and tax avoidance issues

problems with integrating corporate and personal income taxes in an open economy abstract this paper analyzes income tax integration in a small open economy when agents exploit all legal tax arbitrage opportunities the analysis shows that integration does not accomplish the objectives that have been attributed to it instead of eliminating the double taxation of equity income it simply removes the primary taxation of savings done through the corporation the analysis has implications for the choice of a personal tax base and for the design of the corporate tax

taxes firm financial policy and the cost of capital an empirical analysis abstract this paper develops a theoretical model of firm behavior consistent with the maximization of shareholder utility and derives empirically testable implications of different theories of equity finance using data on firm earnings and previous investment and financial behavior we assess whether firms treat new share issues as a more expensive source of finance than retentions and whether such behavior varies across firms according to the composition of their shareholders our results support the hypothesis that firms perceive a higher cost of capital when issuing new shares and that the cost of capital varies significantly across firms having different estimated tax clienteles as theory would predict

conditional investment cash flow sensitivities and financing constraints we study the sensitivity of investment to cash flow conditional on measures of q in an adjustment costs framework with costly external finance we present a benchmark model in which this conditional investment cash flow sensitivity increases monotonically with the cost premium for external finance for firms in a financially constrained regime using simulated data we show that this pattern is found in linear regressions that relate investment rates to measures of both cash flow and average q we also derive a structural equation for investment from the first order conditions of our model and show that this can be estimated directly

work and or fun measuring hedonic and utilitarian shopping value consumer researchers growing interest in consumer experiences has revealed that many consumption activities produce both hedonic and utilitarian outcomes thus there is an increasing need for scales to assess consumer perceptions of both hedonic and utilitarian values this article describes the development of a scale measuring both values obtained from the pervasive consumption experience of shopping the authors develop and validate the scale using a multistep process the results demonstrate that distinct hedonic and utilitarian shopping value dimensions exist and are related to a number of important consumption variables implications for further applications of the scale are discussed

modeling the response to exogenous shocks the capital uplift rate in petroleum taxation abstract we show how a recent drop in the norwegian capital uplift rate by two percentage points changes optimal field design and reduces field value for shareholders although optimal design changes considerably and value drops by 12 the ability to reoptimize design after the shock is worth only 1 5 of field value this evidence suggests that large behavioral effects of a shock do not necessarily imply large value effects making it less important to always account for the taxpayers response the valuation error in such cases may be moderate if one instead uses the simplifying and widespread assumption of unresponsive taxpayers

the role and design of the corporate income tax proposals for tax reform have focused on the role of the corporate tax as either i a tax on pure profits or ii a withholding tax against certain forms of income capital gain income or income accruing to nonresidents little attention has been paid to reconciling these two functions we discuss how both functions can be combined so that the corporate tax can collect revenue from economic rents and withhold income at the same time we explicitly consider both nonfinancial firms and financial intermediaries

green energy market development in germany effective public policy and emerging customer demand this paper reviews the development of renewable energy in germany from 1973 to 2003 it investigates the relative importance of energy policy and green power marketing in shaping the renewable energy market more than a decade of consistent policy support for renewables under the feed in law streg and its successor eeg has been an important driver for increasing renewable electricity generation to date putting the country in a better position than most of its peers when it comes to achieving european union targets for renewable energy green power marketing driven by customer demand on the other hand is growing but has had limited measurable impact so far we discuss potential intangible benefits of green power marketing and scenarios for future market development the paper concludes with lessons that can be learned from the german case for policy design and market development in other countries

corporate taxation and the cost of holding inventories this paper investigates the impact of the corporate tax system and inflation upon the user cost of holding inventories a simple dynamic model of the firm is set up in which the firm chooses an output and an inventory policy so as to maximize its equity value the firm finances its inventory stock through equity and debt expressions for the user cost of inventory capital are derived when the firm is allowed fifo and lifo accounting for tax purposes it is shown that an increase in the inflation rate will reduce the user cost under lifo but will have an ambiguous effect under fifo increases in the corporate tax rate have an ambiguous effect on the user cost we then examine circumstances under which corporate taxation and inflation will not alter the inventory and output decisions the model is extended to include personal taxation and the inventory deduction and a numerical calculation of the user cost of capital using stylized facts for canada is given impot slur les societes et coait des inventaires ce m6moire 6tudie l impact du systeme d imposition des soci6t6s et de l inflation sur les cofits d inventaires on developpe un modele dynamique de l entreprise dans lequel la firme choisit un niveau de production et une politique d inventaires de facon h maximiser la valeur de l avoir des actionnaires l entreprise finance ses inventaires par capital actions et par emprunts les cofits d inventaires sont d6riv6s sous l un et l autre des r6gimes de comptabilit6 permis aux fins du calcul de l imp6t le r6gime fifo first in first out et le r6gime lifo last in first out on montre que l acc6leration du taux d inflation r6duit les cofuts d inventaires en r6gime lifo mais a des effets ambigus en r6gime fifo l impact sur les cofits d inventaires d un accroissement du taux d imposition sur les soci6t6s est aussi ambigu les auteurs s attachent a etablir les conditions dans lesquelles l imposition des societ6s et l inflation n affectent pas les d6cisions quant au niveau de production ou h la politique d inventaires le modele de base est enrichi pour pouvoir tenir compte de l imp6t personnel et des degrevements permis sur les inventaires et les auteurs ajoutent un exemple num6rique du calcul des cofits d inventaires pour un contexte stylis6 approximant le cas canadien an earlier version of this paper was presented at stanford university and at the canadian economics association meetings in halifax the authors are grateful to participants at these presentations and to the editors and referees of this journal for many useful suggestions and comments financial assistance from the sshrc is gratefully acknowledged car dian journal of economics revue canadienne d economique xv no 2 may mai 1982 printed in canada imprim6 au canada 0008 4085 82 0000 0278 01 50 1982 canadian economics association this content downloaded from 157 55 39 203 on wed 14 jun 2017 18 06 46 utc all use subject to http about jstor org terms corporate taxation and the cost of holding inventories 279

how did the notional interest deduction affect belgian smes capital structure the recently introduced risk capital allowance in belgium which allows a notional interest deduction to be denoted nid hereafter on a firm s adjusted equity for tax purposes has mitigated the tax discrepancy between equity and debt financing to our knowledge we provide the first empirical study of the extent to which this regulation has resulted in a strengthening of small and medium sized enterprises to be denoted smes hereafter solvency which was one of its most prominent objectives results from logit regressions reveal that the probability of adopting the nid is higher for lowly leveraged smes smes without experience with the tax exempt investment reserve and smes with a sound knowledge of the notional interest deduction regulation results on the impact of the nid on the capital structure of smes based on panel and first differences regressions reveal that this measure did not result in a significant change of smes leverage in view of the discussion regarding the optimal tax and legislative framework that governments should put in place poutziouris et al j small bus enterp dev 6 1 7 25 1999 these results cast doubt on the risk capital allowance as it stands now being the right government instrument to contribute at least in the short term to creating a pro enterprising tax and legislative climate for smes we conclude by providing some general suggestions for improving the effectiveness of the risk capital allowance

the tax paradox and weak tax neutrality we introduce the concept of weak tax neutrality that establishes that the relationship between the tax rate and the user cost of capital may be non monotonic we show that most existing corporate tax systems allow for weak neutrality that is given the tax allowances permitted by these systems it is possible that neutrality may arise for at least one positive corporate tax rate moreover we show the practical relevance of weak neutrality in realistic situations where there are several asset types and heterogeneous levels of firms debt ratios

equity compensation and the sensitivity of research and development to financial market frictions abstract when financial market frictions exist executives may have to decide which investment activities to reduce when internal funds decrease expenditures on research and development r d may be particularly vulnerable because of the long term nature of innovative activity we find that equity compensation is associated with lower levels of firm r d expenditures rewarding executives to incur more risk has little effect on r d expenditures but rewarding executives for higher returns reduces r d expenditures and makes r d expenditures more sensitive to financial market frictions in contrast cash compensation reduces the sensitivity of r d expenditures to financial market frictions

does green consumerism increase the acceptance of wind power abstract in this paper we discuss what might be termed an action based learning approach to promoting important pro environmental actions such as support for or acceptance of environmental policy such an approach involves promoting simple and easy behaviours as entry points for more radical steps towards sustainability referred to as catalytic or wedge behaviours despite the obvious need for innovative approaches to promote important pro environmental behaviour and sound theoretical backing for such concepts there is a lack of research testing the key propositions of this approach in a survey study based on a random sample of residents of the state of maine usa we find that both everyday green behaviour and the acceptance of an expansion of wind power are rooted in environmental concern and that everyday green behaviour gives a significant contribution to predicting acceptance of wind power when controlling for environmental concern hence the promotion of everyday green behaviours may prepare the grounds for increasing acceptance of more far reaching changes in the population such as an expansion of wind power

tobin s q investment and the endogenous adjustment of financial structure abstract should q theory be modified to take account of financial structure this paper analyzes a general equilibrium q model where financial structure affects firm value agency costs and taxes combine to yield an interior solution for the endogenous debt equity ratio although q is still a sufficient statistic for investment the endogenous adjustment of financial structure alters the relation between the interest rate and investment in this model an increase in the corporate tax rate could either raise or lower the steady state capital stock furthermore both q and investment could jump in opposite directions to that of their steady state values

corporate hedging under a resource rent tax regime in addition to the ordinary corporate income tax special purpose taxes are sometimes levied to extract abnormal profits arising from the use of natural resources such dual tax regimes exist in norway for oil and hydropower where the corresponding special purpose tax bases are unaffected by any derivatives payments dual tax firms with hedging programs therefore face the risk of potentially large discrepancies between the tax bases for corporate income tax and special purpose tax i investigate how this tax base asymmetry influences the extent of hedging of value maximizing firms facing hedgeable as well as unhedgeable risk dual tax firms facing deadweight costs in low profit events generally demand less hedging than ordinary firms but otherwise respond similarly to characteristics of the underlying risk exposures the special purpose tax does not influence firms hedge portfolios in the absence of deadweight cost

taxation corporate financial policy and the cost of capital the cost of capital plays an important role in the allocation of resources among competing uses in a decentralized market system the purpose of this paper is to organize and present what is known and what is hypothesized about the effects of taxation on the incentive to invest via the cost of capital taking full account of important issues that arise independently from the question of taxation included in the analysis is a discussion of empirical findings about the interaction of inflation and taxation in influencing the incentive to invest and a treatment of taxation and uncertainty this abstract was borrowed from another version of this item

an empirical structural model of aggregate demand abstract this paper estimates a structural model of aggregate demand it attempts to avoid two of the shortcomings of most existing macroeconometric models the structure of the model is specified so as to be approximately policy invariant to eliminate the pretesting from which most published estimated models suffer all regression run are reported as the model contains consumption investment and money demand functions close in specification to existing ones it should help the reader judge the reliability of existing estimated functions the estimated model shows a relatively small direct dependence of aggregate demand on the past a much larger dependence on the anticipated future

establishing quality performance of distribution companies based on yardstick regulation this paper proposes a procedure and methodology for performance target setting related to continuity metrics in electricity distribution networks this proposal deals with one of the key issues in the monopoly regulation which is either the reduction of the information asymmetry among economic agents or the emulation of a competitive environment in industry segments usually considered as natural monopolies this paper develops an approach toward standard definitions for customer average interruption duration index dec and customer average interruption frequency index fec based on inter companies comparative analysis this approach introduces productive efficiency concepts to the definition of network performance in order to do so the data envelopment analysis dea technique used for defining the efficiency frontier was combined with the dynamic cluster technique oriented toward models of identification of similar networks a technique for comparative analysis was used for the definition of the network expected performance examples with the brazilian electric systems are provided to clarify the methodology suggested by this paper

the taxation of risky assets this paper reconsiders the effects of taxation on risky assets recognizing the importance of variations in asset prices we show that earlier analyses that assumed that depreciation rates are constant and that the future price of capital goods is known with certainty are very misleading as guides to the effects of corporate taxes we then examine the concept of economic depreciation in a risky environment and show that depreciation allowances if set ex ante should be adjusted to take account of future asset price risk some empirical calculations suggest that these adjustments are large and have important implications for the burdens of and nonneutralities in the corporation income tax

whatever the customer wants the customer gets exploring the gap between consumer preferences and default electricity products in germany abstract in liberalized electricity markets residential customers can choose their preferred provider and select among a variety of different electricity products including green power options successful product design and marketing strategies for green electricity may provide electricity providers with a competitive advantage while at the same time contributing to energy policy objectives this requires however a thorough understanding of customer preferences we investigate the relative importance of different product attributes in creating customer value and find that price and electricity mix are the two most important attributes the german electricity customers we surveyed in 2009 expressed an implicit willingness to pay a premium of about 16 for electricity from renewable sources we conclude that consumers are willing to pay a significant price premium for an upgrade from the current default electricity mix in germany to a more environmentally friendly default electricity mix and discuss implications for marketing strategy and energy policy our findings are based on a dataset of 4968 experimental choices made by 414 german residential consumers collected in a stated preference survey

corporate governance and innovation we use tobin s q models of investments to estimate the relationship between corporate governance and the level of innovative activity simple ordinary least squares ols models suggest that poor governance reduces innovative activity however ols results are sensitive to controlling for serial correlation unobserved effects or using instrumental variables to control simultaneity controlling for these effects substantially reduces or eliminates the relationship between governance and innovative activity

evaluating the effects of ace systems on multinational debt financing and investment abstract theory recommends aligning the tax treatment of debt and equity a few countries notably belgium have introduced an allowance for corporate equity ace to achieve tax neutrality we study the effects of adopting an ace on debt financing passive investment and active investment of multinational firms using high quality administrative data on virtually all german based multinationals we use two main identification strategies based on 1 synthetic control methods and 2 variations across affiliates within the multinational group our results suggest that an ace reduces the corporate debt ratio of multinational affiliates additionally an ace increases intra group lending and other forms of passive investment but has no effects on production investment of multinational affiliates the findings indicate that a unilateral implementation of an ace system generates a tax planning opportunity using a structure combining the benefits from the ace with interest deductions

dea efficiency for the determination of the electric power distribution added value the application of data envelopment analysis methodology is formulated as a tool to determine the distribution added value required in the tariff fixation processes of electrical power distribution that use the concept of model firm as a regulatory basis in order to increase the reliability of the obtained results a bootstrap technique is applied its application is illustrated within the framework of the latest regulatory process in chile

a fresh look at understanding green consumer behavior among young urban indian consumers through the lens of theory of planned behavior abstract rapid economic growth and resulting overconsumption have accelerated environmental deterioration worldwide prompting escalated consumption related environmental concerns this study attempts to explore the antecedents of ecologically conscious consumer behavior eccb among young urban consumers in india an emerging market experiencing rapid economic growth with increased urbanization and changes in consumption patterns that are contributing to environmental hazard the empirical study including a literature review uses theory of planned behavior integrating environmental attitudes subjective norms perceived consumer effectiveness and behavioral intention in the model to investigate their influence on eccb the results suggest that attitudes and perceived consumer effectiveness both have a significant direct and indirect positive influence on eccb in addition it would appear that the subjective norm a measure of social demand does not have any significant influence on behavioral intention leading to eccb contrary to established findings in a collective society considered in this study this paper concludes with policy implications of the findings for marketers and policymakers as well as potential directions for further research

monopolistic competition and the q theory of investment abstract in this paper we analyse the implications for q models of investment of replacing the assumption of perfect competition in the output market with the assumption of monopolistic competition the structural investment equation that can be derived in this case has a richer dynamic structure than the conventional one and it contains in addition to present and future q output as an explanatory variable in the applied section we discuss the extent to which monopolistic competition helps in providing a remedy for the empirical weaknesses of q models the estimates are obtained using aggregate data for u k industrial and commercial companies for the period 1951 1979

on the neutrality of flow of funds corporate taxation real income earning business activities of firms rather than the financial ones furthermore it has virtually ignored the implications of the financial structure of the firm for the neutrality of flow of funds taxation of both real and financial activities of the firm in a model of the firm in which the financial structure has been explicitly included we shall be particularly concerned with the sorts of flow of funds tax systems suggested by the meade report the so called r and r f bases we will show that whether the investment decision is distorted under such corporate tax bases depends on how the financial structure of the firm is determined the r base is neutral under some financial constraints while the r f base is neutral under others 3 we also extend the analysis to incorporate personal taxes impinging on capital income and the effects of inflation finally we introduce financial assets held by the firm we show that the r base can be generalized to what we call the r a base this base will be neutral under the same borrowing constraints for which the r base is neutral in general the r f base as defined in the meade report will not capture all the profits arising from financial intermediation and may