Zusammenfassung
We examine how a firms' investment behavior affects the investment of a neighboring firm. Economic theory yields ambiguous predictions regarding the direction of firm peer effects and consistent with earlier work, we find that firms display similar investment behavior within an area using OLS analysis. Exploiting time-variation in the rise of U.S. states' corporate income taxes and utilizing heterogeneity in firms' exposure to increases in corporate income tax rates, we identify the causal impact of local firms' investments. Using this as an instrumental variable in a 2SLS estimation, we find that an increases in local firms' investment reduces the investment of a local peer firm. This effect is more pronounced if local competition among firms is stronger and supports theories that firm investments are strategic substitutes due to competition.
Schlagworte
investments, peer effects, agglomeration, corporate income tax
Thema
Saving and Borrowing Fiscal Stability Corporate Finance
Beziehungen
Forschungsdaten
JEL-Klassifizierung
Forschungsbereich
Thema
CCM Direct and Indirect Risk-Taking Incentives of Inside Debt Equilibrium Asset Pricing in Directed Networks Leaning Against the Wind: Debt Financing in the Face of Adversity Abandon Ship: Deferred Compensation and Risk-Taking Incentives in Bad Times Local Peer Effects and Corporate Investment Portfolio Similarity and Asset Liquidation in the Insurance Industry The Power of ESG Ratings on Stock Markets Volatility, Valuation Ratios, and Bubbles: An Empirical Measure of Market Sentiment The salience of ESG ratings for stock pricing: Evidence from (potentially) confused investors BEA Commodities, Financialization, and Heterogeneous Agents International Capital Markets with Time-Varying Preferences What Drives Banks' Geographic Expansion? The Role of Locally Non-Diversifiable Risk Horizontal Industry Relationships and Return Predictability The Collateralizability Premium Discount rates, debt maturity, and the fiscal theory G31 Coinvestment and risk taking in private equity funds The Long-Run Real Effects of Banking Crises: Firm-Level Investment Dynamics and the Role of Wage Rigidity G38 Incentive-Based Capital Requirements Financial Regulation in the EU – Cross-Border Capital Flows, Systemic Risk and the European Banking Union as Reference Points for EU Financial Market Integration Non-Mandatory Say on Pay Votes and AGM Participation: Evidence from Germany Freedom of Contract and Financial Stability through the lens of the Legal Theory of Finance Shareholder Wealth vs. Stakeholder interests? Evidence from Code Compliance under the German Corporate Governance Code Remarks on the German Regulation of Crowdfunding Regulation of Crowdfunding in Germany All Economic Ideas are Equal, but Some are more Equal than Others: A Differentiated Perspective on Macroprudential Ideas and their Implementation Accounting for Financial Stability: Lessons from the Financial Crisis and Future Challenges The carrot and the stick: Bank bailouts and the disciplining role of board appointments Corporate Finance Interbank Networks and Backdoor Bailouts: Benefiting from other Banks' Government Guarantees Insight Private Equity Performance Benefits of Tight Control A Repeated Principal-Agent Model with On-the-Job Search Corporate Groups Peer Effects and Risk Sharing in Experimental Asset Markets The Influence of Leveraged Buyouts on Target Firms’ Competitors Taking the Lead: When Non-Banks Arrange Syndicated Loans On the Impact of Leveraged Buyouts on Bank Systemic Risk Compensation Schemes, Liquidity Provision, and Asset Prices: An Experimental Analysis Signaling Cooperation Entrepreneurial Spawning: Experience, Education, and Exit The Old Boy Network: The Impact of Professional Networks on Remuneration in Top Executive Jobs Does Say on Pay Matter? Evidence from Germany Competition in Treasury Auctions Rent-Seeking in Elite Networks The Political Economy of Bank Bailouts Reputation, Honesty, and Cheating in Informal Milk Markets in India Governance in Entrepreneurial Ecosystems: Venture Capitalists vs. Technology Parks The Financing Dynamics of Newly Founded Firms The Effect of Personal Financing Disruptions on Entrepreneurship Women form social networks more selectively and less opportunistically than men Financial Constraints, Newly Founded Firms and the Financial Crisis The Real Effects of Judicial Enforcement Germany's Reluctance to Regulate Related Party Transactions Effects of Government Spending on Employment: Evidence from Winners and Runners-up in Procurement Auctions Only Time will Tell: A Theory of Deferred Compensation Financial Constraints and Corporate EnvironmentalResponsibility Monetary Policy and the Cost of Wage Rigidity: Evidence from the Stock Market Professional Networks and their Coevolution with Executive Careers: Evidence from Europe and North America High-Frequency Trading and Price Informativeness Topic - Saving and Borrowing Expl(AI)ned: The impact of explainable artificial intelligence on cognitive processes Momentum-managed equity factors Call of duty: Designated market maker participation in call auctions The role of disclosure in green finance Impact of public news sentiment on stock market index return and volatility The Value of Firm Networks: A Natural Experiment on Board Connections Time-varying granger causality tests for applications in global crude oil markets: A study on the DCC-MGARCH Hong test OTC Discount Market impact of government communication: The case of presidential tweets Control Thyself: Self-Control Failure and Household Wealth Pricing Sin Stocks: Ethical Preference vs. Risk Aversion Financial Literacy and Socialist Education: Lessons from the German Reunification Client Involvement in Expert Advice: Antibiotics in Finance? Quantifying Inertia in Retail Deposit Markets Financial education, literacy and investment attitudes Inside the ESG Ratings: (Dis)agreement and Performance Can Households See into the Future? Survey Evidence from the Netherlands A Tale of One Exchange and Two Order Books: Effects of Fragmentation in the Absence of Competition Taring All Investors with the Same Brush? Evidence for Heterogeneity in Individual Preferences from a Maximum Likelihood Approach On the (ir)relevance of monetary incentives in risk preference elicitation experiments Consuming Dividends Exposure to the COVID-19 Stock Market Crash and its Effect on Household Expectations Liquidity Provider Incentives in Fragmented Securities Markets Taming Models of Prospect Theory in the Wild? Estimation of Vlcek and Hens (2011) Stock Price Crashes: Role of Slow-Moving Capital Liquidity provision: Normal times vs Crashes Who Are the Bitcoin Investors? Evidence from Indirect Cryptocurrency Investments On the Applicability of Maximum Likelihood Methods: From Experimental to Financial Data Systemic Co-Jumps Will They Take the Money and Work? An Empirical Analysis of People’s Willingness to Delay Claiming Social Security Benefits for a Lump Sum Idiosyncratic Volatility Puzzle: The Role of Assets' Interconnections Does feedback on personal investment success help? Does sophistication affect long-term return expectations? Evidence from financial advisers' exam scores Does Mood Affect Trading Behavior? Estimation and Model-Based Combination of Causality Networks The Impact of Network Connectivity on Factor Exposures, Asset Pricing and Portfolio Diversification Stock Ownership and Political Behavior: Evidence from Demutualizations Much Ado About Nothing: A Study of Differential Pricing and Liquidity of Short and Long Term Bonds Globally Dangerous Diseases: Bad News for Main Street, Good News for Wall Street? Option-Implied Information and Predictability of Extreme Returns Explaining Intra-Monthly Consumption Patterns: The Timing of Income or the Timing of Consumption Commitments? Monetary Policy and Risk Taking When Do Jumps Matter for Portfolio Optimization? Which Market Integration Measure? Optimal Social Security Claiming Behavior under Lump Sum Incentives: Theory and Evidence Twin Picks: Disentangling the Determinants of Risk-Taking in Household Portfolios Growth Options and Firm Valuation Temperature Shocks and Welfare Costs An Extensible Model for Historical Financial Data with an Application to German Company and Stock Market Data Smoking Hot Portfolios? Self-Control and Investor Decisions Who Invests in Home Equity to Exempt Wealth from Bankruptcy? Evaluating the Effectiveness of Policies Against a Pandemic Predictability and the Cross-Section of Expected Returns: A Challenge for Asset Pricing Models The FOMC Risk Shift Natural Disaster and Bank Stability: Evidence from the U.S. Financial System Risk Taking, Preferences, and Beliefs: Evidence from Wuhan Systemic Risk in the Financial Sector: What Can We Learn from Option Markets? Older People’s Willingness to Delay Social Security Claiming High-Dimensional Sparse Financial Networks through a Regularised Regression Model Credit Cycles: Experimental Evidence Ambiguity and Investor Behavior Systemic risk for financial institutions of major petroleum-based economies: The role of oil Smart (Phone) Investing? A Within Investor-Time Analysis of New Technologies and Trading Behavior Partial Information about Contagion Risk, Self-Exciting Processes and Portfolio Optimization Global Realignment in Financial Market Dynamics: Evidence from ETF Networks Gender Differences in Financial Advice The Disposition Effect in Boom and Bust Markets Nobody is Perfect: Asset Pricing and Long-Run Survival When Heterogeneous Investors Exhibit Different Kinds of Filtering Errors A Quasi Real-Time Leading Indicator for the EU Industrial Production Biases in Information Selection and Processing: Survey Evidence from the Pandemic Smoking Hot Portfolios? Self-Control and Investor Decisions Paying for Market Liquidity: Competition and Incentives Designated Market Makers: Competition and Incentives Insurance Activities and Systemic Risk Inflation Expectations and Choices of Households Asset Pricing Under Uncertainty About Shock Propagation Coming Early to the Party The Missing Piece of the Puzzle: Liquidity Premiums in Inflation-Indexed Markets Consumption-Portfolio Choice with Preferences for Cash Quasi-Dark Trading: The Effects of Banning Dark Pools in a World of Many Alternatives Obfuscation and Rational Inattention in Digitalized Markets Bank Rescues and Bailout Expectations: The Erosion of Market Discipline During the Financial Crisis Level and Slope of Volatility Smiles in Long-Run Risk Models High-Frequency Trading and Price Informativeness Can Firms see into the Future? Survey evidence from Germany Job Loss Expectations, Durable Consumption and Household Finances: Evidence from Linked Survey Data Coordination of Circuit Breakers? Volume Migration and Volatility Spillover in Fragmented Markets Spillovers of Funding Dry-ups Depressed Demand The Value of Firm Networks: A Natural Experiment on Board Connections The Intended and Unintended Consequences of Financial-Market Regulations: A General Equilibrium Analysis Cognition, Optimism and the Formation of Age-Dependent Survival Beliefs Add-On Pricing in Retail Financial Markets and the Fallacies of Consumer Education Implied Volatility Duration: A Measure for the Timing of Uncertainty Resolution The Trading Response of Individual Investors to Local Bankruptcies Financial Literacy and Self-Control in FinTech: Evidence from a Field Experiment on Online Consumer Borrowing The Macroeconomic Effects of Asset Purchases Revisited Managing Excess Volatility: Design and Effectiveness of Circuit Breakers Preference Evolution and the Dynamics of Capital Markets Higher-Order Income Risk over the Business Cycle: A Parametric Approach Does Monetary Policy Impact International Market Co-Movements? Does Product Familiarity Matter for Participation? Low-Latency Trading and Price Discovery: Evidence from the Tokyo Stock Exchange in the Pre-Opening and Opening Periods Financial Incentives and Loan Officer Behavior: Multitasking and Allocation of Effort Under an Incomplete Contract Financial Education for the Disadvantaged? A Review Spoilt for Choice: Order Routing Decisions in Fragmented Equity Markets The Geography of Alternative Work The Forward-looking Disclosures of Corporate Managers: Theory and Evidence Volatility-of-Volatility Risk A Modern Take on Market Efficiency: The Impact of Trump’s Tweets on Financial Markets Predictors and Portfolios Over the Life Cycle Pushing Through or Slacking Off? Heterogeneity in the Reaction to Rank Feedback The Impact of Long-Run Macroeconomic Experiences on Personality Topic - Fiscal Stability The geography of banks in the United States (1990-2020) P2P Lending versus Banks: Cream Skimming or Bottom Fishing? Assessing Systemic Fragility – a Probabilistic Perspective The Output Effect of Fiscal Consolidation Plans Reviving the Shadow Banking Chain in Europe: Regulatory Agency, Technical Complexity and the Dynamics of Co-Habitation Does Austerity Pay Off? How did we do? The Impact of Relative Performance Feedback on Intergroup Hostilities Back to the Future: A Sovereign Debt Standstill Mechanism IMF Article VIII, Section 2 (b) Saving Europe?: The Unpleasant Arithmetic of Fiscal Austerity in Integrated Economies Debt Holder Monitoring and Implicit Guarantees: Did the BRRD Improve Market Discipline? EU Agencies in Banking and Energy Between Institutional and Policy Centralisation Resolution Planning and Structural Bank Reform within the Banking Union The Time for Austerity: Estimating the Average Treatment Effect of Fiscal Policy Austerity International Endogenous Growth, Macro Anomalies, and Asset Prices Sovereign Credit Risk, Liquidity, and ECB Intervention: Deus Ex Machina? Fiscal Stimulus and Labor Market Flexibility Bank and Sovereign Debt Risk Connection Technology Trade with Asymmetric Tax Regimes and Heterogeneous Labor Markets: Implications for Macro Quantities and Asset Prices Does Exchange of Information between Tax Authorities Influence Multinationals’ Use of Tax Havens? Euro Membership and Fiscal Reaction Functions Household Debt and Social Interactions Trust in the Monetary Authority Revisiting the Narrative Approach of Estimating Tax Multipliers Banking Union and the Governance of Credit Institutions - A Legal Perspective Informal Sector and Economic Development: The Credit Supply Channel Measuring Sovereign Contagion in Europe A Decentralization Theorem of Taxation Spillover Effects among Financial Institutions: A State-Dependent Sensitivity Value-at-Risk Approach Trust in Government and Fiscal Adjustments Optimal Policy and Taylor Rule Cross-Checking Under Parameter Uncertainty Social Centralization, Bank Integration and the Transmission of Lending Shocks The Single Supervisory Mechanism – Panacea or Quack Banking Regulation? Liquidity Premia in CDS Markets OTC Discount Innovation Dynamics and Fiscal Policy: Implications for Growth, Asset Prices, and Welfare On the Optimal Provision of Social Insurance Supranational Rules, National Discretion: Increasing Versus Inflating Regulatory Bank Capital? International Banking Conglomerates and the Transmission of Lending Shocks Across Borders Systemic Risk and Sovereign Debt in the Euro Area Too Complex to Work: A Critical Assessment of the Bail-in Tool under the European Bank Recovery and Resolution Regime Did Consumers Want Less Debt? Consumer Credit Demand versus Supply in the Wake of the 2008-2009 Financial Crisis The Impact of Temporal Framing on the Marginal Propensity to Consume How do insured deposits affect bank risk? Evidence from the 2008 Emergency Economic Stabilization Act Aggregate and Distributional Effects of Increasing Taxes on Top Income Earners Global Temperature, R&D Expenditure, and Growth On the Distributive Effects of Inflation Trust Me! I am a European Central Banker Are Tax Havens Good? Implications of the Crackdown on Secrecy On Deficits and Symmetries in a Fiscal Capacity Banks’ financial distress, lending supply and consumption expenditure Mutual Excitation in Eurozone Sovereign CDS Buildings' Energy Efficiency and the Probability of Mortgage Default: The Dutch Case Mental Accounting in a Business Cycle Model Exit Strategies Econometrics at Scale: Spark Up Big Data in Economics High-Frequency Trading During Flash Crashes: Walk of Fame or Hall of Shame? Incompatible European Partners? Cultural Predispositions and Household Financial Behavior Vertical Fiscal Imbalances and the Accumulation of Government Debt Pro-rich Inflation in Europe: Implications for the Measurement of Inequality The Impact of Monetary Policy Interventions on the Insurance Industry Austerity, Fiscal Uncertainty, and Economic Growth: Insights from Fiscally Weak EU Countries Topic - Corporate Finance Incentives, self-selection, and coordination of motivated agents for the production of social goods The Limits of Model-Based Regulation Whatever it Takes: The Real Effects of Unconventional Monetary Policy The COVID-19 Shock and Equity Shortfall: Firm-Level Evidence from Ital Hidden Gems and Borrowers with Dirty Little Secrets: Investment in Soft Information, Borrower Self-selection and Competition Bank Response To Higher Capital Requirements: Evidence From A Quasi-Natural Experiment Financing Costs and the Efficiency of Public-Private Partnerships Financing Conditions and Toxic Emissions Collateral Eligibility of Corporate Debt in the Eurosystem The Impact of Job Referrals on Employment Outcomes in Top Corporate Positions Rigid Wages and Contracts: Time- versus State-Dependent Wages in the Netherlands P2P Lending versus Banks: Cream Skimming or Bottom Fishing? Bargaining with a Bank Mirror, Mirror on the Wall: Machine Predictions and Self-Fulfilling Prophecies
Download Working Papers Metadaten