Measuring the impact of financial taxation on capital: Evidence from chilean manufacturing plants

Juan A. Correa, Miguel Lorca, Francisco Parro

Research output: Contribution to journalArticle

Abstract

Using panel data from Chilean manufacturing plants, we estimate the impact of a stamp tax, levied on loans by financial institutions, on capital stock. Our results show that the tax has a statistically significant negative effect on the stock of capital. Specifically, we find that a rise of one percentage point in the financial tax rate decreases the stock of capital by about 4%. We also find that the impact on firms is heterogeneous, depending on the intensity of the different types of capital they hold. In particular, the demand for capital from firms with a higher percentage of structural assets, such as land and buildings, is relatively less affected by the tax.

Original languageEnglish (US)
Pages (from-to)23-39
Number of pages17
JournalJournal of Applied Economics
Volume22
Issue number1
DOIs
StatePublished - Jan 1 2019

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Manufacturing
Tax
Taxation
Assets
Loans
Capital stock
Tax rate
Financial institutions
Panel data

All Science Journal Classification (ASJC) codes

  • Economics, Econometrics and Finance(all)

Cite this

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Measuring the impact of financial taxation on capital : Evidence from chilean manufacturing plants. / Correa, Juan A.; Lorca, Miguel; Parro, Francisco.

In: Journal of Applied Economics, Vol. 22, No. 1, 01.01.2019, p. 23-39.

Research output: Contribution to journalArticle

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