Tax Reform, Trade Openness and Export Product Diversification in Developing Countries

Sèna Kimm Gnangnon

CESifo Economic Studies, 2021, vol. 67, issue 2, 210-234

Abstract: This article considers the effect of tax reform on export product diversification in developing countries, including through the trade openness channel. Tax reform involves the convergence of a developing country's tax structure towards the tax structure of developed countries. The analysis uses a sample of 112 developing countries over the period 1980–2014 and shows that tax reform exerts a positive effect on export product diversification, with least developed countries enjoying a higher positive effect than other countries in the full sample. Furthermore, the higher the degree of trade openness, the greater is the magnitude of the positive effect of tax reform on export product diversification. These outcomes have important policy implications. (JEL codes: H20, O11, O14).

Keywords: tax reform; export product diversification; trade openness (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (3)

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