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dc.contributor.authorNiemann, Raineren_US
dc.date.accessioned2007-12-21en_US
dc.date.accessioned2009-07-28T08:16:10Z-
dc.date.available2009-07-28T08:16:10Z-
dc.date.issued2007en_US
dc.identifier.urihttp://hdl.handle.net/10419/26120-
dc.description.abstractTax legislation, fiscal authorities, and tax courts create tax uncertainty by frequent tax reforms and various different interpretations of the tax law. Moreover, investors generate model-specific tax uncertainty by using simplified models that anticipate the actual tax base incorrectly. I analyze the effects of stochastic taxation on investment behavior in a real options model. The investor holds an option to invest in an irreversible project with stochastic cash flows. To cover the effects of both tax base and tax rate uncertainty, the investment’s tax payment is modelled as a stochastic process. Increased tax uncertainty has an ambiguous impact on investment timing. The view that tax uncertainty depresses real investment is rejected. A higher expected tax payment delays investment. A higher tax rate on interest income affects investment timing ambiguously.en_US
dc.language.isoengen_US
dc.publisherCESifo Münchenen_US
dc.relation.ispartofseriesCESifo working paper 2075en_US
dc.subject.jelH25en_US
dc.subject.jelG31en_US
dc.subject.ddc330en_US
dc.subject.stwBetriebliche Investitionspolitiken_US
dc.subject.stwInvestitionen_US
dc.subject.stwRealoptionen_US
dc.subject.stwIrreversibility of Investmenten_US
dc.subject.stwSteueren_US
dc.subject.stwRisikoen_US
dc.subject.stwTheorieen_US
dc.titleThe impact of tax uncertainty on irreversible investmenten_US
dc.typeWorking Paperen_US
dc.identifier.ppn55583610Xen_US
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungen-
Appears in Collections:CESifo Working Papers, CESifo Group Munich

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