Firm size and taxes

Article English OPEN
Chongvilaivan, Aekapol ; Jinjarak, Yothin (2010)
  • Subject: 3900

The scale dependence in firm growth (smaller firms grow faster) is systematically reflected in the size distribution. This paper studies whether taxes affect the equilibrium firm size distribution in a cross-country context. The main finding is that the empirical association between firm growth and corporate tax (VAT) is positive (negative), with notable differences in the response of manufacturing firms and that of the others. We draw implications for recent debate on the impact of taxes and tax avoidance on the organization of firms in the economy.
  • References (40)
    40 references, page 1 of 4

    Aizenman, Joshua and Yothin Jinjarak, ―Globalization and Developing Countries - a Shrinking Tax Base?,‖ Journal of Development Studies, 45(5), 2009, pp. 653-671.

    Alesina, Alberto, Silvia Ardagna, Roberto Perotti, and Fabio Schiantarelli, ―Fiscal Policy, Profits, and Investment,‖ The American Economic Review, 92(3), 2002, pp. 571-589.

    Alfaro, Laura, Andrew Charlton, and Fabio Kanczuk, ―Firm-Size Distribution and Cross-Country Income Differences,‖ NBER Working Paper No. 14060, 2008.

    Angelini, Paolo and Andrea Generale, ―On the Evolution of Firm Size Distributions,‖ American Economic Review, 98(1), 2008, pp. 426-438.

    Antràs, Pol and Elhanan Helpman, ―Global Sourcing,‖ Journal of Political Economy, 112(3), 2004, pp. 552-580.

    Axtell, Robert L., ―Zipf Distribution of U.S. Firm Sizes,‖ Science, 293(5536), 2001, pp. 1818-1820.

    Backus, David, Espen Henriksen, and Kjetil Storesletten, ―Taxes and the Global Allocation of Capital,‖ Journal of Monetary Economics, 55(1), 2008, pp. 48-61.

    Bernard, Andrew B. and Bradford J. Jensen, ―Firm Structure, Multinationals, and Manufacturing Plant Deaths,‖ Review of Economics and Statistics, 89(2), 2007, pp. 193-204.

    Cabral, Luís M. B. and José Mata, ―On the Evolution of the Firm Size Distribution: Facts and Theory,‖ American Economic Review, 93(4), 2003, pp. 1075-1090.

    Carpenter, Robert E. and Bruce C. Petersen, ―Is the Growth of Small Firms Constrained by Internal Finance?,‖ Review of Economics and Statistics, 84(2), 2002, pp. 298-309.

  • Metrics
    views in OpenAIRE
    views in local repository
    downloads in local repository

    The information is available from the following content providers:

    From Number Of Views Number Of Downloads
    SOAS Research Online - IRUS-UK 0 36
Share - Bookmark