Changes in corporate capital structures and investment in response to tax incentives in the Economic Recovery Tax Act of 1981.

Persistent Link:
http://hdl.handle.net/10150/184996
Title:
Changes in corporate capital structures and investment in response to tax incentives in the Economic Recovery Tax Act of 1981.
Author:
Kinney, Michael Richard.
Issue Date:
1990
Publisher:
The University of Arizona.
Rights:
Copyright © is held by the author. Digital access to this material is made possible by the University Libraries, University of Arizona. Further transmission, reproduction or presentation (such as public display or performance) of protected items is prohibited except with permission of the author.
Abstract:
This study examines the empirical reactions of major U.S. corporations to cost recovery tax incentives contained in the Economic Recovery Tax Act of 1981. The major provision of the act, that is relevant to this study, increases the rate of cost recovery on new investment placed in service after 1980. The purpose of the study is to determine if the empirical responses of the firms to these tax incentives are consistent with recent extensions to financial economic theory. The relevant theory predicts that firms will be sensitive to changes in statutory rates of cost recovery, and they will react to increases in rates of cost recovery in two ways. First, they will respond by increasing their level of investment in covered assets. Second, they will manage the level of their total tax deductions by offsetting (to some extent) the increased level of investment-related deductions with reductions in the level of other tax shields (particularly debt-related deductions). The evidence that is examined is largely consistent with the predictions of the theory. The pattern of growth across firms in the immediate years after the implementation of the act is congruent with tax-sponsored increases in investment. Further, the increase in the available investment-related tax deductions appears to be offset in part by decreases in the level of the debt-related deductions.
Type:
text; Dissertation-Reproduction (electronic)
Keywords:
Business administration; Political science
Degree Name:
Ph.D.
Degree Level:
doctoral
Degree Program:
Business Administration; Graduate College
Degree Grantor:
University of Arizona
Advisor:
Dhaliwal, Dan S.

Full metadata record

DC FieldValue Language
dc.language.isoenen_US
dc.titleChanges in corporate capital structures and investment in response to tax incentives in the Economic Recovery Tax Act of 1981.en_US
dc.creatorKinney, Michael Richard.en_US
dc.contributor.authorKinney, Michael Richard.en_US
dc.date.issued1990en_US
dc.publisherThe University of Arizona.en_US
dc.rightsCopyright © is held by the author. Digital access to this material is made possible by the University Libraries, University of Arizona. Further transmission, reproduction or presentation (such as public display or performance) of protected items is prohibited except with permission of the author.en_US
dc.description.abstractThis study examines the empirical reactions of major U.S. corporations to cost recovery tax incentives contained in the Economic Recovery Tax Act of 1981. The major provision of the act, that is relevant to this study, increases the rate of cost recovery on new investment placed in service after 1980. The purpose of the study is to determine if the empirical responses of the firms to these tax incentives are consistent with recent extensions to financial economic theory. The relevant theory predicts that firms will be sensitive to changes in statutory rates of cost recovery, and they will react to increases in rates of cost recovery in two ways. First, they will respond by increasing their level of investment in covered assets. Second, they will manage the level of their total tax deductions by offsetting (to some extent) the increased level of investment-related deductions with reductions in the level of other tax shields (particularly debt-related deductions). The evidence that is examined is largely consistent with the predictions of the theory. The pattern of growth across firms in the immediate years after the implementation of the act is congruent with tax-sponsored increases in investment. Further, the increase in the available investment-related tax deductions appears to be offset in part by decreases in the level of the debt-related deductions.en_US
dc.typetexten_US
dc.typeDissertation-Reproduction (electronic)en_US
dc.subjectBusiness administrationen_US
dc.subjectPolitical scienceen_US
thesis.degree.namePh.D.en_US
thesis.degree.leveldoctoralen_US
thesis.degree.disciplineBusiness Administrationen_US
thesis.degree.disciplineGraduate Collegeen_US
thesis.degree.grantorUniversity of Arizonaen_US
dc.contributor.advisorDhaliwal, Dan S.en_US
dc.contributor.committeememberPfeiffer, Glenn M.en_US
dc.contributor.committeememberStice, Earl Kayen_US
dc.identifier.proquest9024507en_US
dc.identifier.oclc706823279en_US
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