Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/174950
Authors: 
Langenmayr, Dominika
Simmler, Martin
Year of Publication: 
2017
Series/Report no.: 
CESifo Working Paper 6827
Abstract: 
Firms should use all available information to anticipate future tax rates. Firm mobility, as a key determinant of corporate tax rates, is one such source of information. We first show theoretically that a government sets a higher tax rates on firm profits if average firm mobility in its jurisdiction is low, and that the potential entry of immobile firms in the future deters firms from entering a jurisdiction today. We then test and confirm these predictions in a well-identified setting, using the rapid growth of wind power plants (a very immobile industry) and the large variation in local business taxes across Germany for identification.
Subjects: 
corporate taxation
firm mobility
commitment
tax competition
JEL: 
H25
H71
F21
Document Type: 
Working Paper
Social Media Mentions:

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.