Corporate tax enforcement and business activity
We examine the consequences of corporate tax enforcement for business activity. Using two different empirical approaches—a regional design and a firm-level design—we document that corporate tax enforcement is negatively associated with business activity, as measured by establishments and employment....
| Autores: | , |
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| Tipo de recurso: | artículo |
| Fecha de publicación: | 2025 |
| País: | España |
| Institución: | Universidad de Navarra |
| Repositorio: | Dadun. Depósito Académico Digital de la Universidad de Navarra |
| Idioma: | inglés |
| OAI Identifier: | oai:dadun.unav.edu:10171/116556 |
| Acceso en línea: | https://hdl.handle.net/10171/116556 |
| Access Level: | acceso abierto |
| Palabra clave: | Corporate tax enforcement Business activity Local economies Employment Compliance costs |
| Sumario: | We examine the consequences of corporate tax enforcement for business activity. Using two different empirical approaches—a regional design and a firm-level design—we document that corporate tax enforcement is negatively associated with business activity, as measured by establishments and employment. This association is economically significant and is robust to tests that mitigate concerns regarding endogeneity and measurement. Furthermore, we find that the negative association between tax enforcement and business activity varies substantially in the cross-section. Specifically, we find that it is weaker for regions and firms with greater access to external financing sources and is stronger for regions and firms where compliance costs are likely higher and for which the ex ante costs of tax enforcement are greater. Our findings suggest that the effects of tax enforcement on business activity are economically important and heterogeneous, which should be of interest to academics and policymakers. |
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