Code for: Capital Gains Taxes and Real Corporate Investment: Evidence from Korea

Principal Investigator(s):  View help for Principal Investigator(s) Terry (Seok Min) Moon, University of British Columbia

Version:  View help for Version V1

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  code 04/18/2022 03:59:PM
README.pdf application/pdf 276.4 KB 04/18/2022 12:25:PM

Project Citation: 

Moon, Terry (Seok Min). Code for: Capital Gains Taxes and Real Corporate Investment: Evidence from Korea. Nashville, TN: American Economic Association [publisher], 2022. Ann Arbor, MI: Inter-university Consortium for Political and Social Research [distributor], 2022-07-19. https://doi.org/10.3886/E164361V1

Project Description

Summary:  View help for Summary
This paper assesses the effects of capital gains taxes on investment in Korea, where capital gains tax rates vary at the firm-level by firm size. Following a reform in 2014, firms with a tax cut increased investment by 34 log points and issued more equity by 9 cents per dollar of lagged revenue, relative to unaffected firms. Additionally, the effects were larger for firms that appeared more cash-constrained or went public after the reform. Taken together, these findings are consistent with the “traditional view” predicting that lower payout taxes spur equity-financed investment by increasing marginal returns on investment.

Scope of Project

Subject Terms:  View help for Subject Terms propreitary firm financial data
JEL Classification:  View help for JEL Classification
      G11 Portfolio Choice; Investment Decisions
      G32 Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
      H25 Business Taxes and Subsidies including sales and value-added (VAT)
      O16 Economic Development: Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
Geographic Coverage:  View help for Geographic Coverage Republic of Korea
Time Period(s):  View help for Time Period(s) 1/1/2009 – 12/31/2019
Collection Date(s):  View help for Collection Date(s) 10/30/2017 – 5/15/2020
Universe:  View help for Universe publicly listed and private companies in South Korea
Data Type(s):  View help for Data Type(s) administrative records data

Methodology

Data Source:  View help for Data Source Korea Listed Companies Association
Korea Information Service
Wharton Research Data Services
Unit(s) of Observation:  View help for Unit(s) of Observation firm

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Published Versions

V1 [2022-07-19]

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