Recently, the academic paper "Optimal Tax Timing with Transaction Costs", co-authored by Associate Professor Lei Yaoting (corresponding author) of our school, Professor Min Dai from The Hong Kong Polytechnic University, Professor Hong Liu from Washington University in St. Louis, and Professor Chen Yang from The Chinese University of Hong Kong, has been published online in Management Science, a top international journal in management. This marks the second time Associate Professor Lei Yaoting has published in this prestigious journal.

This study develops a dynamic portfolio model incorporating capital gains tax, transaction costs, and year-end taxation. It finds that even tiny transaction costs can lead to significant deferral of large losses, and their impact on loss deferral is far greater than that on gain deferral. This finding helps explain the academic puzzle that “even when investors face equal long-term/ short-term capital gains tax rates, they may still defer realizing large capital losses for an extended period of time, displaying the disposition effect”. In addition, the study confirms that misestimating transaction costs incurs substantial economic costs and puts forward a series of empirically testable predictions, providing important theoretical support for the optimization and reform of current tax policies.

Management Science, a leading international journal in management and operations research, is listed in the authoritative UTD 24 and FT 50 journal lists. The publication demonstrates the research capability of our faculty in producing high-quality, top-tier research in economics and management, and provides strong support for the disciplinary development and high-quality research development of the school.

Editor:Shi Weikang

Editor in Charge: Shao Hanhua, Zhu Shuye

Reviewer: Wang Yushuai, Fu Zhi