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The Tax Adjusted Q Model With Intangible Assets Theory And Evidence From Temporary Investment Tax Incentives

The Tax adjusted Q Model with Intangible Assets  Theory and Evidence from Temporary Investment Tax Incentives PDF

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Author: Sophia Chen
Publisher: International Monetary Fund
ISBN: 1498347835
Size: 70.50 MB
Format: PDF, ePub
Category : Business & Economics
Languages : en
Pages : 53
View: 3207


We propose a tax-adjusted q model with physical and intangible assets and estimate it with a self-collected comprehensive database of intangible assets. The presence of intangibles changes the accounting and economic measures of q. We show that when tax changes are temporary, the q model can be estimated by adjusting for the firm’s intangible stock and intangible intensity. We estimate our model using temporary investment tax incentive policies in the United States in the early 2000s. When the q-model accounts for intangible assets, the estimated investment elasticity to tax incentives is generally larger than otherwise. It is also larger for intangible-intensive firms, and increases with firm size.

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