Essays on firm dynamics and taxation

Result code in IS VaVaI

<a href="https://www.isvavai.cz/riv?ss=detail&h=RIV%2F67985998%3A_____%2F25%3A00627725" target="_blank" >RIV/67985998:_____/25:00627725 - isvavai.cz</a>

Result on the web

<a href="https://www.cerge-ei.cz/pdf/dissertations/Dissertation_Final_Stojanovic_Danilo.pdf" target="_blank" >https://www.cerge-ei.cz/pdf/dissertations/Dissertation_Final_Stojanovic_Danilo.pdf</a>

DOI - Digital Object Identifier

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Result language

angličtina

Original language name

Essays on firm dynamics and taxation

Original language description

In the first chapter, I show that the U.S. economy benefits from the 2003 tax cuts on dividends and capital gains. In my general equilibrium model, the tax reform reduces the costs of equity issuance, while dividend adjustment costs and a capital-adjusted limit on repurchases drive changes in dividends and repurchases. The tax reform stimulates small, productive firms to increase capital investment by borrowing more from shareholders. Large, less productive firms respond by reducing investment to finance increased payouts to shareholders. This capital reallocation increases aggregate productivity gains, with a part of increased payouts directed to consumption. In the second chapter, we show that increased firm-specific profit uncertainty reduces capital investment. Quantile regressions reveal this effect is stronger at a higher level of investment for firms facing financing constraints compared to those with irreversible capital. Our general equilibrium model evaluates the impact of frictions and their role in transmitting the uncertainty shocks on real and financial outcomes. Firms reduce investment and increase cash holdings to avoid costly borrowing and irreversible capital adjustments. In the third chapter, we study the influence of changes in firms’ entry, exit and borrowing on the propagation of tax shocks in the U.S. economy. We apply a proxy-SVAR model to isolate exogenous variations in tax changes. The model indicates that corporate income tax cuts increase capital accumulation, which relaxes collateral constraints and provides firms with additional funds. These funds sustain initial tax stimulative effects on aggregate productivity and output growth.

Czech name

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Czech description

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Type

O - Miscellaneous

CEP classification

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OECD FORD branch

50202 - Applied Economics, Econometrics

Project

<a href="/en/project/LX22NPO5101" target="_blank" >LX22NPO5101: The National Institute for Research on the Socioeconomic Impact of Diseases and Systemic Risks</a><br>

Continuities

I - Institucionalni podpora na dlouhodoby koncepcni rozvoj vyzkumne organizace

Publication year

2025

Confidentiality

S - Úplné a pravdivé údaje o projektu nepodléhají ochraně podle zvláštních právních předpisů