Corporate governance, taxes and real investment in non-financial firms

Corporate governance, taxes and real investment in non-financial firms: An agent-based approach

van Berkel, Nick (TU Delft Technology, Policy and Management)

Hansen, H.H. (mentor)
Storm, S.T.H. (graduation committee)
Warnier, Martijn (graduation committee)

Delft University of Technology

Engineering and Policy Analysis

2019-11-18

Real investment within non-financial corporations has been steadily decreasing in the last fifty years, as increased payout to shareholders is seen as one of the main causes . Chetty & Saez (2006) argue that taxes on profits, dividend payout and capital gain also have a negative impact on payout, and thus real investment in non-financial firms. However, it is unknown if corporate governance can explain this relationship between taxes and real investment. An agent-based financial market was built to research which types of corporate governance can explain the effect of taxes on the real investment rate. The results show that a corporate governance based on maximizing shareholder value and minimizing interest payments can explain the effect of taxes on the real investment rate. To further define the effect of corporate governance on the real investment rate, an agent-based macroeconomic model can be built that would incorporate more feedback loops of investment and payout and endogenous growth of earnings of firms.

Corporate governance
Investment
Payout Policy
Agent-based modelling
Taxes

http://resolver.tudelft.nl/uuid:79f777a9-9c0c-4761-8e0b-c77df076be5b

Student theses

master thesis

© 2019 Nick van Berkel