Taxation, industry integration and production efficiency
Simone Moriconi
No def043, DISCE - Working Papers del Dipartimento di Economia e Finanza from Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE)
Abstract:
Taxes levied on production processes (e.g. VAT), are today a very important source of government revenues in developed economies. Theories of optimal taxation conclude that these taxes are detrimental to production efficiency, when firms operate in perfectly competitive markets. These theories draw on the neoclassical approach, which regards firms as single production units. The present paper investigates the effects of taxation on production efficiency, accounting for the organization of an industry. The model shows that a lump-sum tax does not have any effect on the organization of the industry, while a non lump-sum tax can be designed that induces an organizational change of the industry. The paper shows that the effect of this ”tax induced organizational change” on production efficiency ultimately depends on the characteristics of the market.
Keywords: taxation; organizational change; vertical integration; and production efficiency. (search for similar items in EconPapers)
JEL-codes: H21 H32 L22 (search for similar items in EconPapers)
Pages: 57
Date: 2016-06
New Economics Papers: this item is included in nep-acc, nep-net, nep-pbe and nep-pub
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (19)
Downloads: (external link)
http://dipartimenti.unicatt.it/economia-finanza-def043.pdf First version, 2016 (application/pdf)
Related works:
Working Paper: Taxation, Industry Integration and Production Efficiency (2016) 
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
HTML/Text
Persistent link: https://EconPapers.repec.org/RePEc:ctc:serie1:def043
Access Statistics for this paper
More papers in DISCE - Working Papers del Dipartimento di Economia e Finanza from Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE) Contact information at EDIRC.
Bibliographic data for series maintained by Simone Moriconi (simone.moriconi@unicatt.it this e-mail address is bad, please contact repec@repec.org).