This paper investigates the impact of economic and political volatility on corporate tax rates on a large dataset of countries over the 1983-2003 period. Estimation of a dynamic tax rate equation supports the hypothesis that economic volatility negatively affects statutory corporate tax rates, while political volatility has no significant effect. In order to identify the channels through which volatility works, we estimate a structural model allowing for simultaneous determination of corporate tax rates and FDI inflows, and find that economic volatility affects the corporate tax setting process through its impact on FDI inflows.

FDI determination and corporate tax competition in a volatile world

REVELLI, Federico
2010

Abstract

This paper investigates the impact of economic and political volatility on corporate tax rates on a large dataset of countries over the 1983-2003 period. Estimation of a dynamic tax rate equation supports the hypothesis that economic volatility negatively affects statutory corporate tax rates, while political volatility has no significant effect. In order to identify the channels through which volatility works, we estimate a structural model allowing for simultaneous determination of corporate tax rates and FDI inflows, and find that economic volatility affects the corporate tax setting process through its impact on FDI inflows.
17
532
555
Mauro Ghinamo; Paolo M Panteghini; Federico Revelli
File in questo prodotto:
File Dimensione Formato  
itax_published2010.pdf

Accesso riservato

Tipo di file: PDF EDITORIALE
Dimensione 589.68 kB
Formato Adobe PDF
589.68 kB Adobe PDF   Visualizza/Apri   Richiedi una copia
itax2010c.pdf

Accesso aperto

Tipo di file: POSTPRINT (VERSIONE FINALE DELL’AUTORE)
Dimensione 336.27 kB
Formato Adobe PDF
336.27 kB Adobe PDF Visualizza/Apri

I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.

Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/2318/134004
Citazioni
  • ???jsp.display-item.citation.pmc??? ND
  • Scopus 21
  • ???jsp.display-item.citation.isi??? 17
social impact