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HEIndividual fellowship2023–2026

CorpCONTROL-in-TAX · Are big firm control and ownership structures crucially shaped by entwined fiscal policies?

Horizon Europe — Marie Skłodowska-Curie Actions

Duration
2023-09-01 → 2026-08-31
EU contribution
€289,408
Participants
4
Scheme
HORIZON-TMA-MSCA-PF-GF

Lines connect the coordinator with its partners.

Results in brief

Are big firm control and ownership structures crucially shaped by entwined fiscal policies?

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.

Data: CORDIS, © European Union

Project objective

CorpCONTROL-in-TAX aims to understand the role of taxation in explaining the development of widely dispersed share ownership in countries like the United Kingdom and the United States, in contrast to the persistence in many continental European states like Germany and Italy of corporate ownership structures characterized by controlling shareholders.The nature and structure of corporate ownership is a fundamental issue in comparative corporate governance, as the idea that ownership concentration limits economic growth and financial development is a central cornerstone of modern corporate finance. Indeed, family-owned listed companies, especially those that are heir-controlled firms, may produce downsides, not only in terms of lowering firm value and profitability, but also by curtailing the functioning of the market for corporate control and engender the extraction of private benefits by the controlling families to the detriment of the minority shareholders.Accordingly, CorpCONTROL-in-TAX investigates the role of taxation on corporate governance in a comparative setting, focusing on the British and American experience, on the one hand, and the German and Italian, on the other. To achieve its goals, the project plans to track, from the 1950s on, the evolution of corporate ownership structures in the United Kingdom, United States, Germany and Italy in connection with the concomitant changes in their tax frameworks. The purpose is to gauge whether different ownership structures - i.e., different frameworks of corporate ownership and control - in the U.K., U.S., Germany and Italy echo divergences in their tax systems, including as regards inheritance taxes, capital gain tax rates and income taxes. Therefore, CorpCONTROL-in-TAX's wide scope considers issues that affect not just one but several countries in Europe. This study does also have special importance for those EU member states where low productivity-related issues are at the forefront of policy debates.

Original text from CORDIS.

Participants

  • UNIVERSITY OF HAMBURG · HamburgCoordinatorGermany
  • MAX-PLANCK-GESELLSCHAFT ZUR FORDERUNG DER WISSENSCHAFTEN EV · MUNCHENGermany
  • THE REGENTS OF THE UNIVERSITY OF CALIFORNIA · OaklandUnited States
  • THE UNIVERSITY OF CHICAGO · CHICAGO ILLINOISUnited States

Links

Data: CORDIS, © European Union