The effect of depreciation allowances on the timing of investment and government tax revenue

Annals of Operations Research

Volumn 151, Issue 1, 2007, Pages 307-323

  Arkin, Vadim I ^a   Slastnikov, Alexander D ^a  

^a CENTRAL ECONOMICS AND MATHEMATICS INSTITUTE   (Russian Federation)

Author keywords

Corporate taxation; Depreciation policy; Investment timing; Net present value; Stochastic cash flows; Tax revenue

Indexed keywords

EID: 33847327907     PISSN: 02545330     EISSN: 15729338     Source Type: Journal    
DOI: 10.1007/s10479-006-0121-9     Document Type: Conference Paper

References (25)

1. Agliardi, E. (2001). "Taxation and Investment Decisions: A Real Option Approach." Australian Economic Papers, 40, 44-55.
2. Amir, E., M. Kirschenheiter, and K. Willard. (1997). "The Valuation of Deferred Taxes." Contemporary Accounting Research, 14(Winter), 597-622.
3. Arkin, V., A. Slastnikov, and E. Shevtsova. (1999). "Tax Incentives for Investment Projects in Russian Economy." Working Paper No.99/03. Moscow: EERC.
4. Arkin, V.I. and A.D. Slastnikov. (2002). "Optimal Tax Depreciation in Stochastic Investment Model." In G. Dzemyda, V. Saltenis, and A. Zilinskas (Eds.), Stochastic and Global Optimization. Dordrecht: Kluwer Academic Publishers.
5. Arkin, V., A. Slastnikov, and S. Arkina. (2003). "Investment Stimulation by a Depreciation Mechanism." Working Paper No.02/05. Moscow: EERC.
6. Arkin, V. I., and A.D. Slastnikov. (2004). "Optimal Stopping Problem and Investment Models." Dynamic Stochastic Optimization. Lecture Notes in Economics and Mathematical Systems, 532, 83-98.
7. Berg, M., A. De Waegenaere, and J. Wielhouwer. (2001). "Optimal Tax Depreciation with Uncertain Future Cash-Flows." European Journal of Operational Research, 132, 197-209.
8. Cummins, J.G., K.A. Hassett, and R.G. Hubbard. (1996). "Tax Reforms and Investment: A Cross-Country Comparison." Journal of Public Economics, 62, 237-273.
9. De Waegenaere, A. and J.L. Wielhouwer. (2002). "Optimal Tax Depreciation Lives and Charges under Regulatory Constraints." OR-Spektrum, 24, 151-177.
10. De Waegenaere, A., R. Sansing, and J.L. Wielhouwer. (2003). "Valuation of a Firm with a Tax Loss Carryover." Journal of American Taxation Association 2003 Supplement, 65-82.
11. Dixit, A.K. and R.S. Pindyck. (1994). Investment under Uncertainty. Princeton: Princeton University Press.
12. Forsfalt, T. (1999). "Taxation of Small Firms under Uncertainty - A Real Option View of Firm Creation." Research Papers in Economics, 1999/0017. Stockholm: Stockholm University.
13. Hassett, K. and G.E. Metcalf. (1994). "Investment with Uncertain Tax Policy: Does Random Tax Policy Discourage Investment?" NBER Working Paper No. 4780.
14. Hu, Y. and B. Øksendal. (1998). "Optimal Time to Invest when the Price Processes are Geometric Brownian Motion." Finance and Stochastics, 2, 295-310.
15. McDonald, R. and D. Siegel. (1986). "The Value of Waiting to Invest." Quarterly Journal of Economics, 101, 707-727.
16. MacKie-Mason, J.K. (1990). "Some Nonlinear Tax Effects on Asset Values and Investment Decisions under Uncertainty." Journal of Public Economics, 42, 301-327.
17. Mauer, D.C. and S.H. Ott. (1995). "Investment under Uncertainty: The Case of Replacement Investment Decisions." Journal of Financial and Quantitative Analysis, 30, 581-605.
18. Niemann, R. (1999). "Neutral Taxation under Uncertainty - A Real Options Approach." Finanzarchiv Neue Folge, 56, 51-66.
19. Øksendal, B. (1998). Stochastic Differential Equations. Berlin, Heidelberg: Springer.
20. Panteghini, P. (2001). "On Corporate Tax Asymmetries and Neutrality." German Economic Review, 2, 269-286.
21. Roemmich, R., G. Duke, and W. Gates. (1978). "Maximizing the Present Value of Tax Savings from Depreciation." Management Accounting, 56, 55-57.
22. Sureth, C. (2002). "Partially Irreversible Investment Decisions and Taxation under Uncertainty: A Real Option Approach." German Economic Review, 3, 185-221.
23. Trigeorgis, L. (1996). Real Options: Managerial Flexibility and Strategy in Resource Allocation. Cambridge: MIT Press.
24. Wakeman, L. (1980). "Optimal Tax Depreciation." Journal of Accounting and Economics, 1, 213-237.
25. Wielhouwer, J.L., A. De Waegenaere, and P.M. Kort. (2000). "Optimal Dynamic Investment Policy for Different Tax Depreciation Rates and Economic Depreciation Rates." Journal of Optimization Theory and Applications, 106, 23-48.