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The Australian bank levy: Do shareholders pay?

Author

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  • Chronopoulos, Dimitris K.
  • Sobiech, Anna L.
  • Wilson, John O.S.
Abstract
Since the global financial crisis, the tax treatment of banks has gained interest in academic and public policy arenas. In this paper, we investigate the stock price reaction of a small sample of commercial banks that were affected by the sudden introduction of a bank levy in Australia. The results of an event study analysis suggest that there is a significant decline in the returns of affected banks following the announcement of the bank levy. This suggests that the banks liable to pay the Australian bank levy lose a considerable percentage (5.2%) of their market capitalisation following its announcement.

Suggested Citation

  • Chronopoulos, Dimitris K. & Sobiech, Anna L. & Wilson, John O.S., 2019. "The Australian bank levy: Do shareholders pay?," Finance Research Letters, Elsevier, vol. 28(C), pages 412-415.
  • Handle: RePEc:eee:finlet:v:28:y:2019:i:c:p:412-415
    DOI: 10.1016/j.frl.2018.06.010
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    References listed on IDEAS

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    Cited by:

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    3. Reed, Jeffrey & Dailey, Emily & Shaffer, Brendan & Lane, Blake & Flores, Robert & Fong, Amber & Samuelsen, Scott, 2023. "Potential evolution of the renewable hydrogen sector using California as a reference market," Applied Energy, Elsevier, vol. 331(C).
    4. Bellucci, Andrea & Fatica, Serena & Heynderickx, Wouter & Kvedaras, Virmantas & Pagano, Andrea, 2023. "Liability taxes, risk, and the cost of banking crises," Journal of Corporate Finance, Elsevier, vol. 79(C).
    5. Zhang, Tong & Burke, Paul J., 2020. "The effect of fuel prices on traffic flows: Evidence from New South Wales," Transportation Research Part A: Policy and Practice, Elsevier, vol. 141(C), pages 502-522.
    6. Sohal, Amrik & De Vass, Tharaka, 2022. "Australian SME's experience in transitioning to circular economy," Journal of Business Research, Elsevier, vol. 142(C), pages 594-604.

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