Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/30479
Authors: 
Gérard, Marcel
Ruiz, Fernando M. M.
Year of Publication: 
2009
Series/Report no.: 
CESifo Working Paper 2904
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.
Subjects: 
institutions and taxation
tax competition
lobbying
JEL: 
H73
H70
Document Type: 
Working Paper

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