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dc.contributor.authorGrossmann, Volkeren_US
dc.contributor.authorStrulik, Holgeren_US
dc.date.accessioned2008-02-28en_US
dc.date.accessioned2009-07-28T08:29:56Z-
dc.date.available2009-07-28T08:29:56Z-
dc.date.issued2008en_US
dc.identifier.urihttp://hdl.handle.net/10419/26280-
dc.description.abstractInheritance taxes may induce heirs to discontinue family firms. Because firm dissolution incurs transaction costs, a preferential tax treatment of transferred family businesses seems to be desirable from a macroeconomic viewpoint. The support of dynastic succession, however, entails also a cost on the economy if firm continuation by less able heirs prevents entry into entrepreneurship. Here, we investigate analytically and quantitatively the trade-off between transaction costs saved and creative destruction prevented. We find that a unique general equilibrium exists at which, depending on the institutional setup, low-ability heirs either abandon (Type 1) or continue (Type 2) a family business. A calibration of the model with German data suggests that preferential tax treatment of family firms has severe negative consequences on macroeconomic performance if it causes a threshold crossing from Type 1 to Type 2 equilibrium. It also reveals that the targeted persons, i.e. the entrepreneurs that are caused to continue a business, always lose relative to their status in an economy without continuation-friendly tax policy.en_US
dc.language.isoengen_US
dc.publisherCESifo Münchenen_US
dc.relation.ispartofseriesCESifo working paper 2235en_US
dc.subject.jelH25en_US
dc.subject.jelL26en_US
dc.subject.jelJ24en_US
dc.subject.ddc330en_US
dc.subject.keywordbequest taxationen_US
dc.subject.keywordcreative destructionen_US
dc.subject.keywordentrepreneurshipen_US
dc.subject.keywordfamily firmsen_US
dc.subject.keywordpreferential tax treatmenten_US
dc.subject.stwSteuerbegünstigungen_US
dc.subject.stwFamilienunternehmenen_US
dc.subject.stwBetriebsübergangen_US
dc.subject.stwUnternehmeren_US
dc.subject.stwInnovationen_US
dc.subject.stwTransaktionskostenen_US
dc.subject.stwAllgemeines Gleichgewichten_US
dc.subject.stwDeutschlanden_US
dc.titleShould continued family firms face lower taxes than other estates?en_US
dc.typeWorking Paperen_US
dc.identifier.ppn559092016en_US
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungen-
Appears in Collections:CESifo Working Papers, CESifo Group Munich

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