Application of an intervention model to the influence of land value increment tax reduction policy on the Taiwan stock market

Abstract

This study elucidates the economic consequences of halving the tax on incremental changes in land value in Taiwan. When government openly supports and pledges to accelerate the necessary legislation, stock returns are expected to rise. The evidence shows that government implemented property laws significantly and positively influences the stock market. In contrast, given the conditions that manifest out of good news, market returns are anticipated to decline. The findings indicate the stock market exhibits a clear, significant negative effect if policy formulation is hindered by static matters.