NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Government Policy and Ownership of Financial Assets

Kristian Rydqvist, Joshua Spizman, Ilya A. Strebulaev

NBER Working Paper No. 17522
Issued in October 2011
NBER Program(s):   AP   CF   PE

Since World War II, direct stock ownership by households across the globe has largely been replaced by indirect stock ownership by financial institutions. We argue that tax policy is the driving force. Using long time-series from eight countries, we show that the fraction of household ownership decreases with measures of the tax benefits of holding stocks inside tax-deferred plans. This finding is important for policy considerations on effective taxation and for financial economics research on the long-term effects of taxation on corporate finance and asset prices.

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Document Object Identifier (DOI): 10.3386/w17522

Published: Government Policy and Ownership of Financial Assets, 2014 Journal of Financial Economics 111, 70-85 (with Kristian Rydqvist and Joshua Spizman)

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