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on Corporate Finance |
| By: | Paolo M. Panteghini |
| Abstract: | The new view holds that a dividend tax is capitalised and leaves the mature firm’s decisions undistorted, provided marginal investment is financed out of retained earnings. The firm reaches that regime by first withholding its earnings, and while it withholds them the dividend tax is not in force. This article places the two regimes inside a trade-off model with debt and endogenous default, so that maturity is an event the firm chooses and may never reach. The dividend tax does not reach the immature firm. It taxes the passage to maturity, and its whole content is one number, the value of a unit distributed relative to a unit retained. Lowering that number from unity to 0.60 lifts the expansion trigger by a factor of 3.4, cuts the probability of ever maturing from 59.8% to 23.7% and the value today of one unit paid at maturity by 90%. At the baseline a third of firms ever mature, and nine tenths of the firm’s discounted lifetime is spent in the regime in which the new view does not apply. The tax also creates the shield that pays for the passage: a firm that can recapitalise at maturity keeps maturing at dividend rates at which a firm that cannot borrow never does, provided the proceeds leave through repurchases rather than dividends. The firms that never mature are those whose expansion buys a small productivity gain and that cannot borrow when they make it. |
| Keywords: | new view, dividend taxation, firm life cycle, dynamic trade-off theory, growth option |
| JEL: | G31 G32 G33 H25 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_13013 |
| By: | HARA, Yasushi |
| Abstract: | This paper examines M&A, representative changes, and business activity changes among Japanese firms in construction, manufacturing, retail, and agriculture using corporate data-based panel summaries and regression results. Firms with M&A experience are larger on average in the pooled descriptive data, but these differences are not exclusively pre-treatment comparisons. Descriptive Kaplan–Meier curves show no uniform M&A survival advantage: company-disappearance profiles differ in manufacturing and retail, while the displayed bankruptcy log-rank tests do not reject equality at the 5% level in any sector. Event-study regressions report cohort-specific coefficients for sales, employment, and customer counts in levels, with firm and year fixed effects and two-way clustered standard errors. The estimated trajectories vary across cohorts and outcomes, and some pre-event differences call for caution in causal interpretation. Conditional Cox models associate M&A with lower exit hazards across all four sectors. The separate counterparty turnover analysis demonstrates qualitative network upgrading rather than mere link-count contraction: in construction, newly added customers exhibit significantly higher capital scale and sales than discontinued partners. Pair regressions identify sector-specific distance and capital associations, and the executive-age analysis finds an M&A-probability discontinuity at absolute age 70 in retail, which disappears when centered around industry retirement peaks. These results distinguish conditional hazards and counterparty restructuring from unadjusted survival comparisons and gross customer counts. |
| Keywords: | Business succession, Mergers and acquisitions, Small and medium-sized enterprises, Firm survival, Firm performance, Interfirm transaction networks, Japan |
| JEL: | G34 L25 L14 |
| Date: | 2026–09 |
| URL: | https://d.repec.org/n?u=RePEc:hit:tdbcdp:e-2026-03 |
| By: | Alyssa Vespuce Desvarieux (Rennes SB - Rennes School of Business); Taoufik Bouraoui (Rennes SB - Rennes School of Business) |
| Abstract: | This article analyzes the impact of ESG (Environmental, Social and Governance) performance on US companies' profitability. We used as proxies CO2 emissions for the environmental component, job satisfaction and gender pay gap for the social pillar, and ethnic diversity on board for the governance pillar. We implemented a Vector Error Correction Model (VECM) using monthly data during the period from December 2008 to January 2022. Our results reveal that, in the long-term, increasing ethnic diversity on board and reducing gender pay gap contribute to an enhancement in profitability. However, in the short-term, companies' financial performance is found to be affected positively by CO2 emissions and negatively by ethnic diversity on board. Overall, the potential for increased company's performance and the well-being of society when ESG considerations are effectively integrated into corporate strategies should encourage companies to include ESG practices into their business models. |
| Keywords: | Sustainable finance profitability ESG Vector Error Correction Model, Vector Error Correction Model, ESG, profitability, Sustainable finance |
| Date: | 2026–06–01 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05743284 |