Impuestos corporativos y capital: veintiséis años de evidencia en empresas

Abstract

We analyze the effect of corporate tax on the capital stock desired by Chilean firms. Following the theory, we present a model and then we provide empirical evidence from stocks of companies traded on the stock exchange from 1983 to 2008. Our results indicate that a one-percentage-point increase in corporate tax reduces the capital-output ratio by 0.2 to 0.6 percentage points. Furthermore, between 28% and 54% of the adjustment occurs during the year in which the tax change is implemented.