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https://doi.org/10.3326/pse.44.3.2

Penny wise and pound foolish: capital gains tax and trading volume on the Zagreb Stock Exchange

Tomislav Globan   ORCID icon orcid.org/0000-0001-5716-2113 ; Faculty of Economics & Business, University of Zagreb, Zagreb, Croatia
Tihana Škrinjarić   ORCID icon orcid.org/0000-0002-9310-6853 ; Faculty of Economics & Business, University of Zagreb, Zagreb, Croatia

Puni tekst: engleski, pdf (867 KB) str. 299-329 preuzimanja: 53* citiraj
APA 6th Edition
Globan, T. i Škrinjarić, T. (2020). Penny wise and pound foolish: capital gains tax and trading volume on the Zagreb Stock Exchange. Public Sector Economics, 44 (3), 299-329. https://doi.org/10.3326/pse.44.3.2
MLA 8th Edition
Globan, Tomislav i Tihana Škrinjarić. "Penny wise and pound foolish: capital gains tax and trading volume on the Zagreb Stock Exchange." Public Sector Economics, vol. 44, br. 3, 2020, str. 299-329. https://doi.org/10.3326/pse.44.3.2. Citirano 18.10.2021.
Chicago 17th Edition
Globan, Tomislav i Tihana Škrinjarić. "Penny wise and pound foolish: capital gains tax and trading volume on the Zagreb Stock Exchange." Public Sector Economics 44, br. 3 (2020): 299-329. https://doi.org/10.3326/pse.44.3.2
Harvard
Globan, T., i Škrinjarić, T. (2020). 'Penny wise and pound foolish: capital gains tax and trading volume on the Zagreb Stock Exchange', Public Sector Economics, 44(3), str. 299-329. https://doi.org/10.3326/pse.44.3.2
Vancouver
Globan T, Škrinjarić T. Penny wise and pound foolish: capital gains tax and trading volume on the Zagreb Stock Exchange. Public Sector Economics [Internet]. 2020 [pristupljeno 18.10.2021.];44(3):299-329. https://doi.org/10.3326/pse.44.3.2
IEEE
T. Globan i T. Škrinjarić, "Penny wise and pound foolish: capital gains tax and trading volume on the Zagreb Stock Exchange", Public Sector Economics, vol.44, br. 3, str. 299-329, 2020. [Online]. https://doi.org/10.3326/pse.44.3.2

Sažetak
This paper analyses the effects of a recently introduced capital gains tax on the trading volume on the Zagreb Stock Exchange. Using three different methodological approaches – event study methodology, regression discontinuity design and panel regressions – we offer evidence that the introduction of the capital gains tax in January 2016 created abnormally high trading volume patterns shortly before the tax came into force and abnormally low volume patterns after the fact, further decreasing the liquidity of an already poorly liquid market. The negative effects are significant in both the short and the longer term, as our difference-in-differences estimations suggest that the average trading volume in the three post-tax years decreased by 23% vis-à-vis the pre-tax period. Given that the revenues collected from this tax are almost negligible, but create considerable negative externalities, our main policy recommendation for countries with underdeveloped and not very liquid stock markets is to use less restrictive tax policies to encourage investment and attract as many new investors as possible.

Ključne riječi
capital gains tax; event study; regression discontinuity; stock market; trading volume

Hrčak ID: 243083

URI
https://hrcak.srce.hr/243083

Posjeta: 176 *