Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/263716 
Year of Publication: 
2022
Series/Report no.: 
CESifo Working Paper No. 9786
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
This paper estimates the causal effect of corporate tax hikes on firm investment based on more than 1,400 local tax changes. By observing planned and realized investment volumes in a representative sample of German manufacturing firms, we can study how tax hikes induce firms to revise their investment decisions. On average, the share of firms that invest less than previously planned increases by three percentage points after a tax hike. This effect is twice as large during recessions.
Subjects: 
investment
corporate taxation
state dependence
business cycle
JEL: 
G11
H25
H32
H71
O16
Document Type: 
Working Paper
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