Taxation, infrastructure, and firm performance in developing countries

Lisa Chauvet and Marin Ferry

Public Choice, 2021, vol. 187, issue 3, No 9, 455-480

Abstract: Abstract This paper investigates the relationship between taxation and firm performance in developing countries. Combining firm-level data from the World Bank Enterprise Surveys and tax data from the Government Revenue Dataset, our results suggest that taxation benefits firm growth in developing countries, especially in lower-income countries. This positive contribution of domestic revenue to firm performance seems to channel through the financing of the public infrastructure vital to firms operating in these countries. We also provide evidence that this positive effect disappears when corruption is too pervasive, and when the source of tax revenue reduces government accountability.

Keywords: Taxation; Firm growth; Infrastructure; Corruption (search for similar items in EconPapers)
JEL-codes: D22 D24 O23 O43 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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Related works:
Working Paper: Taxation, infrastructure, and firm performance in developing countries (2021)
Working Paper: Taxation, infrastructure, and firm performance in developing countries (2021)
Working Paper: Taxation, infrastructure, and firm performance in developing countries (2016)
Working Paper: Taxation, infrastructure, and firm performance in developing countries (2016)
Working Paper: Taxation, infrastructure, and firm performance in developing countries (2016)
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DOI: 10.1007/s11127-020-00788-4

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