Eichfelder, Sebastian; Jacob, Martin; Schneider, Kerstin - 2020
This paper examines the effect of tax incentives in the form of bonus depreciation on the quality of investment. Using … establishments, we show that bonus depreciation significantly lowers the quality of investment. The average quality of investments …, measured by the responsiveness of future sales to current investment, reduces by 22.6-34.6%. This adverse effect of tax …