Zusammenfassung:
A broad empirical literature examines the impact of corporate taxes on firms' investment, location, and tax avoidance behaviour. Other corporate adjustment margins have received little attention. In this paper, we use administrative customs and tax return data from South Africa to demonstrate that corporate taxes influence firms' export performance and their competitiveness in international product markets. Leveraging a difference-in-differences approach, we find that exports by South African firms decline significantly when foreign competitors-serving the same destination market in the same six-digit product category-experience a corporate tax rate cut. In further analyses, we document that reductions in competitors' tax costs are associated with a decline in the real economic activity of South African exporters.