University of Illinois Urbana-Champaign

The Shifting of Corporate Capital Acquisition Tax Subsidies: An Empirical Analysis

Craig, Caroline Kern

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Description

Title
The Shifting of Corporate Capital Acquisition Tax Subsidies: An Empirical Analysis
Author(s)
Craig, Caroline Kern
Issue Date
1987
Department of Study
Accountancy
Discipline
Accountancy
Degree Granting Institution
University of Illinois at Urbana-Champaign
Degree Name
Ph.D.
Degree Level
Dissertation
Keyword(s)
  • Business Administration, Accounting
  • Economics, Finance
Abstract
  • This study investigates whether corporations shift the benefits associated with capital acquisition tax subsidies, and whether such shifting behavior is affected by the competitive pressures in the marketplace (as reflected by industry barriers to entry). The capital acquisition tax subsidy is defined as the sum of the tax savings derived from the investment tax credit and accelerated (or excess tax) depreciation deductions, as disclosed in corporate financial statements.
  • A theoretical framework is developed to explain why firms receiving capital acquisition tax subsidies could be expected to shift the associated benefits to others. Specifically, it is argued that the threat of competition from potential market entrants will induce subsidy recipients to pass on the related benefits to parties outside the corporation.
  • The study's methodology chapter develops an inferential multiple regression model to test for the presence of the shifting phenomenon and the related "barrier" effect. The study investigates the corporate shifting response of domestic manufacturers during the period 1973-1985, inclusive, using a pooled time-series and cross-sectional research design.
  • The study's empirical results do not provide evidence in support of the capital acquisition tax subsidy shifting phenomenon.
Graduation Semester
1987
Type of Resource
text
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http://hdl.handle.net/2142/71405

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