TY - JOUR

T1 - Corporate taxes and multi-product exporters

T2 - Theory and evidence from trade dynamics

AU - Flach, Lisandra

AU - Irlacher, Michael

AU - Unger, Florian

N1 - Publisher Copyright: © 2021 Elsevier B.V.

PY - 2021/9

Y1 - 2021/9

N2 - This paper analyzes how exporters are affected by corporate tax reforms in destination markets. We introduce tax policy in a trade model of multi-product firms and show that producers face tougher competition in export markets with lower corporate tax rates. This competitive effect induces firms to reduce the number of exported products and to skew their export sales towards the better performing varieties. We estimate the effects of corporate taxes on trade dynamics by exploiting policy reforms in 42 destination countries of exports during the period 2005–2012. Our results provide strong support for competitive effects of corporate taxation.

AB - This paper analyzes how exporters are affected by corporate tax reforms in destination markets. We introduce tax policy in a trade model of multi-product firms and show that producers face tougher competition in export markets with lower corporate tax rates. This competitive effect induces firms to reduce the number of exported products and to skew their export sales towards the better performing varieties. We estimate the effects of corporate taxes on trade dynamics by exploiting policy reforms in 42 destination countries of exports during the period 2005–2012. Our results provide strong support for competitive effects of corporate taxation.

KW - Corporate taxation

KW - Exporter dynamics

KW - International trade

KW - Multi-product firms

KW - Economics

UR - http://www.scopus.com/inward/record.url?scp=85111864902&partnerID=8YFLogxK

U2 - 10.1016/j.jinteco.2021.103515

DO - 10.1016/j.jinteco.2021.103515

M3 - Journal articles

AN - SCOPUS:85111864902

VL - 132

JO - Journal of International Economics

JF - Journal of International Economics

SN - 0022-1996

M1 - 103515

ER -