Corporate taxation and the impact of governance, political and economic factors
(2009) CESifo Area Conference on Public Sector Economics — Location: Munich (24.April.2009)
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- Authors
- Abstract
- In this paper we first use two international data sets to investigate how governance, political and economic factors influence corporate tax rates. We show that institutional and political factors matter: good governance reduces the tax rate; a parliamentary system, especially a plurality election system, and religious or nationalist executives too, push tax rates upward. Traditional variables also matter: economic openness has a negative effect on tax rates although market size has a positive one. Though it is not robust, interaction among neighbors also plays a role. Then we turn to theory and extend a standard model of tax competition to provide a channel for the elements set forth so far to influence tax rates formation; nested in the economic theory of lobbying that exercise provides our empirical investigation with theoretical foundations. JEL: H73, H70.
- Affiliations
Louvain School of Management Accounting & Finance FUCaM Sciences de gestion FUCaM Sciences de gestion
Citations
Gérard, M., & Ruiz, F. (2009). Corporate taxation and the impact of governance, political and economic factors. CESifo Area Conference on Public Sector Economics, Munich. https://hdl.handle.net/2078.5/250333