Plausibly Exogenous [1804] - TCJA (01/10/2025)

LHS Variable
Firms’ investment and financing choices

RHS Variable
Limiting interest deductions

Source of Exogenous Variation
Discontinuity in the eligibility for the interest limitation based on size of pre-reform receipts in the Tax Cuts and Jobs Act (TCJA)

- Richmond, Goodman, and Isen (2023), “Tax Policy, Investment, and Firm Financing: Evidence from the U.S. Interest Limitation”