Can corporate taxation be explained by limited liability?

Miglo, A ORCID: 2011, 'Can corporate taxation be explained by limited liability?' , in: Business and finance : performance and management , Business economics in a rapidly-changing world , Nova Science, pp. 185-190.

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We consider a model where wealth-constrained entrepreneurs have private information about the qualities of available investment projects. We show that some ”high risk-high return” projects will receive external financing even if they are not socially profitable. Some ”low risk-low return” projects will not be funded even if they are socially profitable. Government interventions can improve equilibrium. Optimal government policy may include corporate taxation, subsidies or other instruments. A universal tax on all entrepreneurs with limited liability is not optimal.

Item Type: Book Section
Editors: Morland, RB and Gagglione, AJ
Schools: Schools > Salford Business School
Journal or Publication Title: Business and Finance: Performance and Management
Publisher: Nova Science
Series Name: Business economics in a rapidly-changing world
ISBN: 9781611229363 (print); 9781621001546 (ebook)
Related URLs:
Depositing User: Dr Anton Miglo
Date Deposited: 25 May 2021 13:02
Last Modified: 04 Nov 2021 14:32

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