Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/55849
Authors: 
Rünger, Silke
Year of Publication: 
2012
Series/Report no.: 
Arqus-Diskussionsbeiträge zur quantitativen Steuerlehre 126
Abstract: 
Germany's repeal of the corporate capital gains tax for the disposal of domestic holdings was expected to substantially change the system of corporate network holdings and corporate control. Based on a general divestiture model, we show that the probability of a disposal increased after the tax reform. Using a unique data set with no need to proxy for the disposal of corporate equity holdings, we analyze 354 German minority holdings over the period 1999-2007. We find significant higher disposal rates for 2002, the year the reform became effective. Further analyses reveal that this effect can be attributed to non-listed parent companies outside the financial sector, i.e. companies mainly ignored in prior research. Thus, our results also help to explain why prior research using event studies failed to detect a widespread market reaction of German firms.
Subjects: 
corporate capital gains
lock-in effect
corporate equity holdings
Germany
JEL: 
G11
G34
H25
H32
Document Type: 
Working Paper

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