TAXES AS DETERMINANTS OF BUSINESS INVESTMENT : EMPIRICAL EVIDENCE IN SPANISH COMPANIES THAT ARE NOT LISTED ON THE STOCK MARKET

Abstract

This article analyzes whether the desire to avoid future tax payments , calculated in terms of net deferred taxes that are recorded in companies' balance sheets, could be established, together with the explanatory factors documented in the previous literature, as a determinant of business investment . Our empirical analysis provides solid results showing that future tax payments are an additional motivation for making decisions investment . However , our findings also show that, to a certain extent, tax motivations could explain situations of overinvestment, although the evidence obtained from these episodes shows moderate statistical significance.