Essays on the Real Effects of Tax Reforms
von Lisa Hillmann
Datum der mündl. Prüfung:2020-12-15
Betreuer:Prof. Dr. Andreas Oestreicher
Gutachter:Prof. Dr. Olaf Korn
Gutachter:Prof. Dr. Robert Schwager
EnglischThis thesis examines the real effects of tax reforms. Policymakers frequently use tax reforms to influence companies’ real economic decisions, e.g. investment decisions. The underlying assumption is that taxes play a significant role in the decision-making process of firms. Against this background, this thesis comprises three empirical studies on the real effects of tax reforms. The first study examines whether a dividend tax increase, which only affects corporate shareholders owning a minority stake, has an effect on private firms’ payout decisions and on minority shareholders’ portfolio choices. The findings suggest that firms do not change their payout decisions, but corporate shareholders significantly reduce their minority stakes after the dividend tax reform. Additional cross-sectional tests reveal that the reduction in corporate shareholders’ minority stakes is larger for those invested in firms with high dividend payouts and a majority shareholder. The dividend tax responsiveness is also larger for financially distressed corporate shareholders with a minority stake that do not belong to the same group as the firm in which they own a minority stake. The second study investigates whether a change to a less beneficial tax depreciation regime impacts the investment decisions of finance lease companies. The results suggest that finance lease firms significantly reduce their investments in tangible assets after the reform. Since finance lease firms are financial institutions and thus subject to regulatory requirements, cross-sectional analyses reveal that the exposure of finance lease firms to regulatory requirements moderates their investment response. Additional cross-sectional tests show that business model characteristics, such as a product focus on mobile assets, affect their responsiveness to the change in tax depreciation allowances. The third study examines the effects of mandatory public disclosure of tax information on banks. The results reveal that EU multinational banks reduce their tax avoidance behaviour after the Country-by-Country Reporting disclosure requirement became effective. Additional findings suggest that EU multinational banks reduce their economic activities after the reform, indicating that a decrease in tax avoidance creates real effects. Cross-sectional tests reveal that detection/enforcement risks and reputational concerns moderate the reduction in banks’ tax avoidance and their economic activities. This thesis contributes to the literature in four ways. First, it sheds more light on the real effects of tax reforms and thereby answers the call for research on the real effects of taxation. Second, the thesis examines intended and unintended consequences of tax reforms. Third, it contributes to the identification of heterogeneity in firms’ responses to changes in taxation. Finally, the three studies capture the reactions of financial institutions and private firms that have not been the focus of empirical tax research so far.
Keywords: Tax Reforms; investment decisions; dividend taxation; payout policy; tax transparency; tax avoidance; tax depreciation