Titolo della tesi: Essays in Financial Economics and Taxation
The recent financial crisis has prompted a debate on the issues on taxation of financial institutions. The current study seeks to complement a small but growing literature on the impact of reforms in the corporate taxation on banks’ supply of credit to the real sector. The aim of this empirical work is to demonstrate the causal relationship between an exogenous tax shock affecting differently financial institutions with heterogeneous funding structure and its propagation to bank lending to small and medium enterprises. We use staggered variations in the US State corporate tax rates to show that these reforms affect banks’ supply of credit to the real economy through their differential effect on the liability side of a bank’s balance sheet. We combine the bank balance sheet and income statement data from the FDIC Call Reports and the Summary of Deposits’ data on bank branches and headquarters location with the information on the small business loans made by each US commercial bank in each US county. In the first chapter of the thesis, we find that the impact on lending is heterogeneous and depends on financial institutions’ capitalization level as well as their choice of funding structure in the pre-treatment period. Further to that, our findings in the second chapter confirm the existence of a bank credit supply spill-over mechanism as a response to a state tax shock. In the literature survey, we review small but emerging literature on bank taxation, the interplay between taxation and regulation, as well as its possible consequences for the overall financial stability.