This article compares an ACE system with a CBIT system in an open economy. Using a realoption approach we show that, if a firm can decide when to invest, a tradeoff is found. According to traditional wisdom, a high-income firm investing in an ACE system faces a heavier tax burden at each...

This article studies the effects of corporate tax asymmetries on irreversible investment. We discuss an asymmetric tax scheme where the tax base is given by the firm's return, net of an imputation rate. When the firm's return is less than this rate, however, no tax refunds are allowed. Contrary...

This article discusses the effects of an asymmetric tax scheme on incremental and sequential investment strategies. The tax base is equal to the firm s return, net of an imputation rate. When the firm s return is less than this rate, however, no tax refunds are allowed. This scheme is neutral...

This article discusses the effects of taxation on the discrete choice of alternative projects. In particular, it is shown that if taxation affects the optimal timing of irreversible investment, then the discrete choice is distorted as well. This result has both methodological and political...

This paper addresses the issue of how regulatory constraints affect firm's investment choices when the firm has an option to delay investment. The RPI-x rule is compared to a profit sharing rule, which increases the x factor in case profits go beyond a given level. It is shown that a pure price...

In this article we study start-up investments in developing countries. Using a representative firm, we wonder how relevant are the effects of taxation and risk on new business activities. It is worth noting that developing countries are usually characterized by three main characteristics....

This article compares an ACE system with a CBIT system in an open economy. Using a realoption approach we show that, if a firm can decide when to invest, a tradeoff is found. According to traditional wisdom, a high-income firm investing in an ACE system faces a heavier tax burden at each...

This article studies the relationship between debt policies of multinational companies (MNCs) and governments' tax strategies. In the first part, it is shown that the ability to shift income from high- to low-tax countries affects MNCs' financial choices. In the second part we show how MNCs'...

The evidence shows that in most countries the present value of depreciation allowances is less than 100% of the cost of capital. In this article we use a real-option model with debt financing, and show that less favorable depreciation allowances are offset by tax benefits arising from debt...

This paper investigates the role of economic and political volatility in the process of corporate tax-rate determination. The article is based on a theoretical framework that allows for the ability of multinational firms to choose the optimal timing of foreign investment and to shift profits by...