Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/59589 
Year of Publication: 
2012
Series/Report no.: 
Economics Discussion Papers No. 2012-31
Publisher: 
Kiel Institute for the World Economy (IfW), Kiel
Abstract: 
This article describes the new ACE-type system implemented in Italy since 2012. The authors first show that this system reduces but does not eliminate the financial distortion due to interest deductibility. Using a dataset of Italian companies, the authors analyze the impact of this relief on Italian firm capital structure. Despite the permanence of a tax advantage and its gradual implementation, the ACE relief is estimated to reduce significantly leverage. By decreasing default risk it is also expected to reduce systemic risk.
Subjects: 
ACE
business taxation
leverage
JEL: 
H25
H32
Creative Commons License: 
cc-by-nc Logo
Document Type: 
Working Paper

Files in This Item:
File
Size
251.43 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.