Corporate taxes and multi-product exporters: Theory and evidence from trade dynamics
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In: Journal of International Economics, Vol. 132, 103515, 09.2021.
Research output: Journal contributions › Journal articles › Research › peer-review
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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 -