Published and Forthcoming Papers
The Effect of Succession Taxes on Family Firm Investment: Evidence from a Natural Experiment
Journal of Finance, forthcoming
Winner of the Trefftzs Award, WFA 2010
Abstract: The paper provides causal evidence on the impact of succession taxes on firm investment decisions and transfer of control. I exploit a 2002 policy change in Greece that repealed the tax on intra-family transfers of businesses and show that succession taxes lead to more than a 40% decline in investment around family successions, slow total asset growth and depletion of cash reserves. Furthermore, succession taxes strongly affect the decision to sell or retain the firm within the family. These findings have broad implications since 40% of privately held firms in the US and Europe will undergo succession in the next decade.
WORKING PAPERS
Tax Evasion across Industries: Soft Credit Evidence from Greece
with Nikolaos Artavanis and Adair Morse [Updated Draft, June 2012]
Abstract: We begin with the new observation that banks lend to tax-evading individuals based on the bank's perception of true income. This insight leads to a novel approach to estimate tax evasion from private-sector adaptation to semiformality. We use household microdata from a large bank in Greece and replicate bank models of credit capacity, credit card limits, and mortgage payments to infer the bank’s estimate of individuals’ true income. We estimate a lower bound of 28 billion euros of unreported income for Greece. The foregone government revenues amount to 31 percent of the deficit for 2009. Primary tax-evading occupations are doctors, engineers, private tutors, accountants, financial service agents, and lawyers. Testing the industry distribution against a number of redistribution and incentive theories, our evidence suggests that industries with low paper trail and industries supported by parliamentarians have more tax evasion. We conclude by commenting on the property right of informal income.
Featured in The Wall Street Journal, The NY Times, The WashingtonPost, The Financial Times, The Economist Free Exchange and Kathimerini
The Ex-Ante Value of Foreclosures" (with Adair Morse)
New -- Preliminary Working Paper Available. Please email me
Work in Progress
"Shareholder Democracy in Play: Career Consequences of Proxy Contests” (with Vyacheslav Fos)
“Bequeathing the Family Firm,” (Joint with Morten Bennedsen, Francisco Perez-Gonzalez, and Daniel Wolfenzon)
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