Periodic Reporting for period 1 - CorpCONTROL-in-TAX (Are big firm control and ownership structures crucially shaped by entwined fiscal policies?)
Berichtszeitraum: 2023-09-01 bis 2025-08-31
The project investigates the interplay between capital markets and tax policy in shaping investment patterns, corporate control, market competition and trade policy across multiple jurisdictions, including the United States and Western Europe. Modern corporations operate in increasingly complex and interconnected financial environments where capital mobility, taxation, and regulatory frameworks critically influence corporate decisions, market efficiency, and the distribution of capital investment. Despite their strategic importance, comparative analyses of these dynamics remain limited, particularly when integrating legal, economic, and fiscal perspectives.
The primary objective of this research is to understand how different legal structures and tax policies affect corporate control, financing choices, and the broader competitive landscape of international capital markets. By examining factors such as taxation of income and capital, along with wealth transfer mechanisms and cross-border levies, the project aims to clarify how fiscal and regulatory frameworks can either facilitate or constrain investment, transparency, and operational efficiency.
The project pathway to impact involves generating rigorous, empirically grounded, and policy-relevant insights that can inform both academic discourse and decision-making by regulators and institutions. Anticipated outcomes include enhanced understanding of the structural challenges in European capital markets, evidence-based recommendations for improving corporate governance and taxation policies, and the establishment of international collaborations fostering cross-border trade policy. These impacts are significant at both the scientific and policy level, as they address systemic issues influencing capital allocation, competitiveness, and economic growth in developed economies.
The primary objective of this research is to understand how different legal structures and tax policies affect corporate control, financing choices, and the broader competitive landscape of international capital markets. By examining factors such as taxation of income and capital, along with wealth transfer mechanisms and cross-border levies, the project aims to clarify how fiscal and regulatory frameworks can either facilitate or constrain investment, transparency, and operational efficiency.
The project pathway to impact involves generating rigorous, empirically grounded, and policy-relevant insights that can inform both academic discourse and decision-making by regulators and institutions. Anticipated outcomes include enhanced understanding of the structural challenges in European capital markets, evidence-based recommendations for improving corporate governance and taxation policies, and the establishment of international collaborations fostering cross-border trade policy. These impacts are significant at both the scientific and policy level, as they address systemic issues influencing capital allocation, competitiveness, and economic growth in developed economies.
The project followed a three-phase research pathway, integrating comparative corporate analysis, fiscal policy examination, and interdisciplinary synthesis. The first phase involved detailed comparisons of corporate and investment structures across selected jurisdictions, analyzing family-owned firms, publicly held companies, and investment funds, including venture capital and private equity, to provide a throughout picture of contemporary corporate financing and control mechanisms in different economic contexts.
The second phase examined taxation and fiscal frameworks, including corporate and personal income taxes, capital levies, estate and inheritance taxes, exit taxes and levies on capital flows. These analyses highlighted how tax rules shape investment incentives, firm structuring and financing, and cross-border capital flows. The integration of legal and economic perspectives enabled a nuanced assessment of policy effectiveness and its influence on corporate and investment structures.
The third phase consolidated the insights from the previous phases into integrated outputs.
Multiple peer-reviewed publications are being produced, advancing knowledge at the intersection of law, economics, and finance. The research identified structural patterns in corporate and fiscal interactions, highlighting how differences in taxation and financial governance frameworks influence firm structure and capital allocation. Notably, the project also facilitated international collaborations, with co-authored papers linking U.S. and European scholars, expanding the global impact of the findings.
The second phase examined taxation and fiscal frameworks, including corporate and personal income taxes, capital levies, estate and inheritance taxes, exit taxes and levies on capital flows. These analyses highlighted how tax rules shape investment incentives, firm structuring and financing, and cross-border capital flows. The integration of legal and economic perspectives enabled a nuanced assessment of policy effectiveness and its influence on corporate and investment structures.
The third phase consolidated the insights from the previous phases into integrated outputs.
Multiple peer-reviewed publications are being produced, advancing knowledge at the intersection of law, economics, and finance. The research identified structural patterns in corporate and fiscal interactions, highlighting how differences in taxation and financial governance frameworks influence firm structure and capital allocation. Notably, the project also facilitated international collaborations, with co-authored papers linking U.S. and European scholars, expanding the global impact of the findings.
The project advances the state of the art by providing an interdisciplinary and comparative framework for analyzing corporate and investment structures, capital markets, and taxation. It demonstrates, for example, how partial relief mechanisms for intercorporate dividends in the United States promote simpler corporate structures, whereas full tax exemptions in the EU incentivize complex multi-layered entities that may reduce transparency and raise the cost of capital.
By linking fiscal rules to corporate structuring and investment incentives, the research identifies previously underexplored mechanisms that influence market structure, shareholder choice in terms of control and firm financing, as well as capital mobility.
The potential impacts extend beyond academic knowledge. The findings highlight regulatory and tax-policy gaps affecting capital allocation and financial market development, particularly in Europe. Further uptake could be supported by additional cross-jurisdictional studies and, especially, through broader engagement with policymakers.
Ensuring continued collaboration with international scholars and access to comparative datasets could also be crucial to extend these findings. In the longer term, this work can provide a foundation for evidence-based regulatory and tax reforms that strengthen capital markets and improve corporate governance.
By linking fiscal rules to corporate structuring and investment incentives, the research identifies previously underexplored mechanisms that influence market structure, shareholder choice in terms of control and firm financing, as well as capital mobility.
The potential impacts extend beyond academic knowledge. The findings highlight regulatory and tax-policy gaps affecting capital allocation and financial market development, particularly in Europe. Further uptake could be supported by additional cross-jurisdictional studies and, especially, through broader engagement with policymakers.
Ensuring continued collaboration with international scholars and access to comparative datasets could also be crucial to extend these findings. In the longer term, this work can provide a foundation for evidence-based regulatory and tax reforms that strengthen capital markets and improve corporate governance.