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Title:The Shifting of Corporate Capital Acquisition Tax Subsidies: An Empirical Analysis
Author(s):Craig, Caroline Kern
Department / Program:Accountancy
Degree Granting Institution:University of Illinois at Urbana-Champaign
Subject(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.
Issue Date:1987
Description:151 p.
Thesis (Ph.D.)--University of Illinois at Urbana-Champaign, 1987.
Other Identifier(s):(UMI)AAI8803008
Date Available in IDEALS:2014-12-16
Date Deposited:1987

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