Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/161490
Authors: 
Chauvet, Lisa
Ferry, Marin
Year of Publication: 
2016
Series/Report no.: 
WIDER Working Paper 2016/103
Abstract: 
This paper investigates the relationship between taxation and firm performance in developing countries. Taking firm-level data from the World Bank Enterprise Surveys (WBES) and tax data from the Government Revenue Dataset (ICTD/UNU-WIDER), our results suggest that tax revenue benefits to firm growth in developing countries, especially in low-income countries and lower-middle income countries. These findings are robust to the inclusion of alternative covariates and specifications, and do not appear to be sample dependent. We also provide evidence that the positive effect of taxation on firm growth falls significantly when corruption is too pervasive, and when the origin of tax revenue origin reduces government accountability. Lastly, our paper finds that the positive effect of domestic revenue on firm performance could channel through the financing of public infrastructures vital to firms operating in lower-income countries.
Subjects: 
taxation
firm growth
infrastructure
corruption
ISBN: 
978-92-9256-147-5
Document Type: 
Working Paper

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