The effects of countercyclical fiscal policy: Firm-level evidence from temporary consumption tax cuts in Turkey

Florian Misch and Atılım Seymen

No 12-082, ZEW Discussion Papers from ZEW - Leibniz Centre for European Economic Research

Abstract: The paper investigates the effects of temporary consumption tax cuts using firm-level data. As part of its countercyclical measures implemented during the recent global economic crisis, Turkey temporarily lowered consumption taxes on selected durables. Using data on the change of sales of firms that benefited from this measure and of those that did not over different periods, we perform a difference-in-difference analysis where we also control for various unobservable effects including sector-specific shocks to address potential endogeneity. We find positive and robust effects of consumption tax cuts on the change of firm sales which is consistent with theoretical predictions.

Keywords: countercyclical fiscal policy; consumption tax cuts; firm-level data (search for similar items in EconPapers)
JEL-codes: E32 E62 H20 (search for similar items in EconPapers)
Date: 2012
New Economics Papers: this item is included in nep-ara, nep-mac and nep-pbe
References: View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Related works:
Working Paper: The Effects of Countercyclical Fiscal Policy: Firm Level Evidence from Temporary Consumption Tax Cuts in Turkey (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:zewdip:12082

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