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dc.contributor.authorGrossmann, Volkeren_US
dc.contributor.authorStrulik, Holgeren_US
dc.date.accessioned2008-03-28en_US
dc.date.accessioned2009-08-06T13:11:16Z-
dc.date.available2009-08-06T13:11:16Z-
dc.date.issued2008en_US
dc.identifier.urihttp://hdl.handle.net/10419/27197-
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.publisherFachbereich Wirtschaftswiss., Univ. Hannoveren_US
dc.relation.ispartofseriesDiscussion papers // School of Economics and Management of the Hanover Leibniz University 387en_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.ppn560550065en_US
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungen-
Appears in Collections:Diskussionspapiere, Wirtschaftswissenschaftliche Fakultät, Universität Hannover

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