Taxes, mobile capital, and economic dynamics in a globalizing world

Lucas Bretschger

Journal of Macroeconomics, 2010, vol. 32, issue 2, 594-605

Abstract: This contribution provides evidence for the hypothesis that trade increases growth through its curbing effect on capital taxes. The analyzed trade-growth channel includes a negative impact of openness on corporate taxes and a negative effect of taxes on growth. The paper explores the two steps theoretically and empirically, taking into account the different theories and estimation problems involved. Simultaneous estimations with panel data for a sample of 12 OECD countries in the period 1965-1999 confirm a significant and robust impact of trade on growth through corporate taxes.

Keywords: Trade; and; growth; Tax; competition; Capital; taxes; and; mobility; OECD; countries (search for similar items in EconPapers)
Date: 2010
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Citations: View citations in EconPapers (6)

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Related works:
Working Paper: Taxes, Mobile Capital, and Economic Dynamics in a Globalising World (2005)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jmacro:v:32:y:2010:i:2:p:594-605

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