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State of the art modeling of investment behavior and analysis of incentive and allocative effects of taxation on investment behavior are reported in these proceedings. Leading researchers from seven OECD countries treat problems ranging from modeling investment behavior and estimating investment equations with various data sets to detailed studies of tax influences on investment behavior. Particular attention is paid to tax reform plans, especially in West Germany and the UK. The role of financial variables and uncertainty is analysed. A major topic in the volume is recent work within Tobin's Q-theoretic framework. Papers report developments and applications of Q-type investment functions, and for the first time estimated Q-theoretic investment equations are presented for West German industries taking into account the complex tax structure.
List of contents
Introduction: A Summary of the Issues.- What Does Tobin's Q ADD to Modelling of Investment Behaviour?.- Fixed Investment in Japan.- Testing the Sensitivity of Q Investment Equations to Measurement of the Capital Stock.- Taxation and Capital Formation in West German Industries: A Q-Theory Approach.- Economic Policy, Profits, and Investment Behavior in West Germany.- Anticipated Tax Changes And Investment in the UK: An Empirical Evaluation of the 1984 Tax Reform.- Taxation of Capital Income in the Federal Republic of Germany.- Capital Mobility, the Cost of Capital Under Certainty and Effective Tax Rates in Europe.- Government Policies, the Working of Financial Market, Saving and Investment in Japan.- Investment, Finance and Corporate Tax Policy.- The Optimal Reaction of Production and Investment on Uncertainty.
