Corporate tax competition and innovation: An inverted-U relationship

Xiaoyang Zhu ()
Additional contact information
Xiaoyang Zhu: Wichita State University

Economics Bulletin, 2022, vol. 42, issue 2, 447 - 457

Abstract: This paper studies how the downward corporate tax rate affects firms' innovations. Using a cross-country firm-level panel, we find that both higher and lower corporate income-tax could hinder firm innovations, which implies an inverted-U relationship between the statutory corporate income-tax rate and firm innovation. A potential explanation of nonlinearity is that a lower tax rate alters the market structure.

Keywords: Corporate income tax; Firm innovation; Market competition (search for similar items in EconPapers)
JEL-codes: H2 O3 (search for similar items in EconPapers)
Date: 2022-06-30
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.accessecon.com/Pubs/EB/2022/Volume42/EB-22-V42-I2-P39.pdf (application/pdf)

Related works:
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:ebl:ecbull:eb-21-00626

Access Statistics for this article

More articles in Economics Bulletin from AccessEcon
Bibliographic data for series maintained by John P. Conley ().