Fargo, N.D. — Fariz Huseynov, assistant professor of finance at NDSU, has been notified his co-written manuscript, "Tax Policy and Macro-Finance in a Competitive Global Economy Where Government is Considered as Firm's Third Financial Stakeholder," has been accepted for publication in Global Business and Economics Review. The international refereed journal presents, discusses and analyzes advanced concepts, initial treatments and fundamental research in all fields of business and economics.

The authors propose a macro-financial model to be included with traditional financial macroeconomic theory postulating that economic activity results from aggregate effects of all domestic private and public saving and investment, net international trade, inter-country capital flows and consumption decisions. They modify Modigliani and Miller's capital structure propositions by adding government as the third major financial stakeholder where government possesses a stake in the firm because of the potential, just as stockholders, to receive future cash flows.

"We posit a 'conservation of value' where capital structure and domestic tax structure have no effect on total firm value; however, affect relative stakeholder values, discount rates, capital investment and flow of capital into and out of a country," Huseynov wrote. "We also develop an intertemporal model that allows for reinvestment of retained earnings and firm growth. Changes in tax structure, capital structure and dividend policy in the intertemporal model affect a firm's growth rate and its aggregate value as well as distribution of value across stakeholders. We observe that corporate taxes potentially have a greater impact on a firm's level of capital investment and resulting growth than personal taxes. At the aggregate, corporate taxes may also affect a country's level of capital formation and economic growth."