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Home | Events Archive | The Dynamic Effects of Corporate Tax Policy in Oligopolies
Seminar

The Dynamic Effects of Corporate Tax Policy in Oligopolies

  • Series
    Research on Monday
  • Speaker(s)
    Thomas Gresik (University of Notre Dame, United States)
  • Field
    Organizations and Markets, Macroeconomics
  • Location
    Erasmus University Rotterdam, Campus Woudestein, Polak 3-18
    Rotterdam
  • Date and time

    October 16, 2023
    11:30 - 12:30

Abstract

We model capital investment in an oligopoly as an infinite-horizon dynamic game and analyze the short-run and long-run economic effects of a country’s corporate tax policy. In an industry with a low rate of capital depreciation (or product turnover), an increase in the tax deductibility of a firm’s capital investments, as reflected in a shift from income taxation to cash flow taxation,

decreases market concentration and increases consumer surplus at the cost of large tax subsidies. However, in industries with a high rate of depreciation, the shift increases consumer surplus and tax revenues at the cost of higher market concentration. Joint paper with Giorgi Piriashvili.