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2007, Taxation and the evolution of aggregate corporate ownership concentration
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| Venue: | Taxing Corporate Income in the 21st Century (Cambridge |
| Citations: | 4 - 0 self |
BibTeX
@INPROCEEDINGS{Desai_2007,taxation,
author = {Mihir A. Desai and Dhammika Dharmapala and Winnie Fung},
title = {2007, Taxation and the evolution of aggregate corporate ownership concentration},
booktitle = {Taxing Corporate Income in the 21st Century (Cambridge},
year = {},
pages = {345--383},
publisher = {University Press}
}
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Abstract
The concentration of corporate ownership is a critical element of a corporate governance environment and reflects the degree to which different income groups participate in the stock market. Legal rules, politics and behavioral factors have all been emphasized as explanatory factors in analyses of corporate ownership concentration and the degree to which different income groups hold equities. An extension of standard tax clientele arguments demonstrates that changes in the progressivity of taxes can also significantly influence corporate ownership concentration. A novel index of the concentration of corporate ownership over the twentieth century in the U.S. provides the opportunity to quantitatively test for the role of taxes in shaping ownership concentration. The index of ownership concentration is characterized by considerable time series variation, with significant diffusion of ownership in the post WWII era and reconcentration in the late 1990s. Analysis of this index indicates that the progressivity of taxation significantly influences corporate ownership concentration and equity market participation as predicted by the model. This evidence supports the intuition of Berle and Means (1932) that taxation can significantly influence patterns of equity ownership.
Keyphrases
aggregate corporate ownership concentration different income group corporate ownership concentration corporate ownership ownership concentration equity ownership behavioral factor novel index post wwii era critical element significant diffusion stock market equity market participation explanatory factor corporate governance environment legal rule late 1990s standard tax clientele argument influence corporate ownership concentration twentieth century considerable time series variation
