Policy Externalities and Banking Integration

Smolyansky, Michael

doi:10.17016/feds.2016.008

Cited by 6 publications

(6 citation statements)

References 49 publications

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“…In the literature of the subject numerous scholars, in addition to discussing the mechanisms, classifications, have also discussed the external phenomena of externalities and their appearances [29,35,36]. Externalities have been studied in the banking sector [37,38], insurance [39], coal mining [33], renewable energy [34] and other specific industries. Buchanan and Stubblebine (1962) gave a mathematical representation of externalities: The so-called externality is an independent variable of the welfare function of an economic entity, producing a function which shows that if an economic welfare task is affected by other factors not controlled by itself, there is an externality [40].…”

Section: Both Effectsmentioning

confidence: 99%

Finance, Sustainability and Negative Externalities. An Overview of the European Context

et al. 2019

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The goal of the paper is to examine the relation between finance and sustainability, with a special emphasis on the impact of negative externalities. Sustainable development as a concept aims to mitigate negative externalities. Conventional finance offers no room for the environment and society. Therefore, three-dimensional sustainable finance has appeared. This paper is the first original attempt to examine the relationship between: financial, economic, environmental and social development indicators from the sustainability perspective, with a special focus on externalities. To study the disparities between the European Union (EU) countries belonging to the OECD in the field of sustainable development and sustainable finance, the multi-criteria taxonomy was used. The basis of the analyses was the indicators transformed according to the relative taxonomy method. The database, based on Eurostat, contains indicators describing pillars of sustainable development such as: economic (12 indicators), social (28), environmental (7) and sustainable finance (16). The study analyses the sample of 23 countries in 2007, 2013 and 2016. The results confirm a positive relationship among the analysed indicators. On the basis of 62 statistical features selected according to the statistical methods, 7 groups of countries were obtained in 2007 and 2013 and 8 groups in 2016. In the case of Scandinavian countries, one can observe a permanent separation of economic growth from its negative impact on the natural environment. Such dependencies are no longer so obvious in the case of other EU countries belonging to the Organization for Economic Cooperation and Development (OECD). Therefore, attention should be paid to the most economically developed countries in Western Europe, i.e., Belgium, Germany, Luxembourg, the Netherlands and the United Kingdom, whose high rankings in the case of economic, social and very often also financial results correspond to much worse results in the case of environmental development.

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Section: Both Effectsmentioning

confidence: 99%

Finance, Sustainability and Negative Externalities. An Overview of the European Context

et al. 2019

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“…To reduce taxation, banks can shift from offering loans in state B to increase supply in state A, where perhaps no tax accrues. Smolyansky (2019) finds that banks decrease their loan supply in those states that increased their tax rate and increased it in those states with no change. He also shows that employment and state income negatively respond to a decrease in the loan supply, suggesting real economic consequences.…”

Section: Organizational (Form) Choices and Consequencesmentioning

confidence: 99%

“…Evidence on whether changes in tax preferences actually spill over is weak or preliminary. Smolyansky (2019) is the first to show that changes in U.S. state taxes incentivize banks to shift their credit supply to other states that offer more favorable conditions. A preliminary study by Biswas, Horváth, and Zhai (2019) uses the Belgian introduction of ACE to show that banks use freed reserves to increase the credit supply to specific borrower groups.…”

Section: Areas For Future Researchmentioning

confidence: 99%

Banks and Corporate Income Taxation: A Review

Gawehn

2019

SSRN Journal

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In this paper, I review the empirical literature in the intersection of banks and corporate income taxation that emerged over the last two decades. To structure the included studies, I use a stakeholder approach and outline how corporate income taxation plays into the relation of banks and their four main stakeholders: bank regulators, customers, investors and tax authorities. My contribution to the literature is threefold: First, I contribute by providing, to the best of my knowledge, a first comprehensive review on this topic. Second, I point to areas for future research. Third, I deduce policy implications from the studies under review. In sum, the studies show that taxes distort banks' pricing decisions, the relative attractiveness of debt and equity financing, the decision to report on or off the balance sheet and banks' investment allocations. Empirical insights on how tax rules affect banks' decision-making are helpful for policymakers to tailor suitable and sustainable tax legislation directed at banks. JEL CLASSIFICATION G21, H22, H25, M41 KEYWORDS Corporate income taxes, banks, stakeholder approach, decision-making process I sincerely acknowledge helpful and constructive comments from participants of the TAF Research Seminar at the University of Paderborn. I also greatly acknowledge funding by the Deutsche Forschungsgemeinschaft

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“…In this study, we explore whether corporate tax enforcement aimed at small and midsized enterprises (SMEs) impacts bank commercial lending. The banking sector is an important setting to explore tax enforcement externalities because of its role in promoting economic growth through the provision of capital Maksimovic, [1998, 1999], Levine and Zervos [1998], Levine [2003], Smolyansky [2019]). In particular, banks are a primary source of capital for SMEs, which find other capital markets (e.g., bond or equity) too costly (Strahan and Weston [1998], Berger, Klapper, and Udell [2001], Cetorelli and Strahan [2006]).…”

Section: Introductionmentioning

confidence: 99%

Corporate Tax Enforcement Externalities and the Banking Sector

Gallemore

Jacob

2020

J of Accounting Research

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We explore whether corporate tax enforcement can affect bank lending. Specifically, we hypothesize that tax enforcement efforts aimed at small and midsized enterprises (SME) can improve their information environments, which in turn could lead to increased bank commercial lending. Exploiting the regional structure employed by the IRS until 1999, we find that the corporate tax return audit probability for SMEs is associated with greater commercial lending growth for regionally focused banks. We find similar evidence

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Policy Externalities and Banking Integration

Cited by 6 publications

References 49 publications

Finance, Sustainability and Negative Externalities. An Overview of the European Context

Finance, Sustainability and Negative Externalities. An Overview of the European Context

Banks and Corporate Income Taxation: A Review

Corporate Tax Enforcement Externalities and the Banking Sector

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