Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/331359 
Year of Publication: 
2025
Series/Report no.: 
IFN Working Paper No. 1531
Publisher: 
Research Institute of Industrial Economics (IFN), Stockholm
Abstract: 
We use a natural experiment and administrative data to study the effect of corporate tax cuts on business activity. For identification, we exploit the abolition of municipal corporate income taxation in Sweden in 1985, which created variation in corporate tax changes faced by different municipalities. Our findings indicate an expansion of business activity and employment in large firms following a tax cut. However, we find no significant impact on these outcomes for small firms. In addition, firm entry rates increase in municipalities experiencing the largest tax cuts.
Subjects: 
Corporate taxation
Business activity
Employment
Firm entry
JEL: 
G31
G38
H21
H25
Document Type: 
Working Paper

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