Subscribe Now Subscribe Today
Research Article
 

Investment Tax, Interest Rate Effect and The Entrepreneur’ Welfare: Theory and Numerical Calculation



Xia Zi-Xiang, Tian Cun-Zhi and Lu Ya-Qin
 
Facebook Twitter Digg Reddit Linkedin StumbleUpon E-mail
ABSTRACT

Based on the external financing analysis framework of asymmetric information, the study establishes an general equilibrium model which contains the investment tax. Firstly, this study investigates that the investment tax are how to influence the size of the equilibrium interest rate and investigates the internal mechanism of the investment tax impact of capital market equilibrium interest rate. Secondly, this study studies the investment tax impact on the investment activities and welfare of different classes of entrepreneurs, proves that the entrepreneurs with very weak financial strength are not suffered any injury from a tight fiscal policy; the entrepreneurs whose financial strength is in the borderline of policy are given the greatest effects from the investment tax; the entrepreneurs with strong financial strength are affected both positive and negative, under certain conditions, the total effect is positive. Finally, this study comparative analyzes that the investment tax have different effects on the capital market of information asymmetric and the capital market of symmetric information.

Services
Related Articles in ASCI
Similar Articles in this Journal
Search in Google Scholar
View Citation
Report Citation

 
  How to cite this article:

Xia Zi-Xiang, Tian Cun-Zhi and Lu Ya-Qin, 2013. Investment Tax, Interest Rate Effect and The Entrepreneur’ Welfare: Theory and Numerical Calculation. Journal of Applied Sciences, 13: 3168-3174.

DOI: 10.3923/jas.2013.3168.3174

URL: https://scialert.net/abstract/?doi=jas.2013.3168.3174
 

REFERENCES
1:  Fama, E.F., 1985. What's different about banks? J. Monetary Econ., 15: 29-39.
CrossRef  |  

2:  Fisher, R.A., 1936. The use of multiple measurements in taxonomic problems. Ann. Eugen., 7: 179-188.
CrossRef  |  Direct Link  |  

3:  Friedman, M., 1968. The role of monetary policy. Am. Econ. Rev., 58: 1-17.

4:  King, M., 1994. Debt deflation: Theory and evidence. Eur. Econ. Rev., 38: 419-445.
CrossRef  |  

5:  Kydland, F.E. and E.C. Prescott, 1982. Time to build and aggregate fluctuations. Econometrica: J. Econ. Soc., 50: 1345-1370.
Direct Link  |  

6:  Lucas Jr., R.E., 1972. Expectations and the neutrality of money. J. Econ. Theory, 4: 103-124.

7:  Phelps, E.S., 1967. Phillips curves, expectations of inflation and optimal unemployment over time. Economica, 34: 254-281.
Direct Link  |  

8:  Suarez, J. and O. Sussman, 1997. Endogenous cycles in a Stiglitz-Weiss economy. J. Econ. Theory, 76: 47-71.
CrossRef  |  

9:  Tirole, J., 2006. The Theory of Corporate Finance. Princeton University Press, Princeton, NJ., USA.

10:  Ma, S.Y., 2001. Macro tax burden, investment and economic growth: Estimates of Chinese optimal tax rate. J. Word Econ., 9: 41-46.

11:  Wu, L.N. and Z.F. Lu, 2005. The relationship between enterprise investment behavior and the financing structure-based on the discovery of an experimental study. Manage. World, 4: 99-105.

12:  Xu, M.D. and X.B. Chen, 2012. Corporate investment and the cost of capital: Evidence from China. Econ. Res. J., 3: 40-52.

©  2021 Science Alert. All Rights Reserved