Do fiscal policies affect the firms’ growth and performance? Urban versus rural area

Alessandra Amendola, Marinella Boccia (), Gianluca Mele () and Luca Sensini ()
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Marinella Boccia: University of Salerno
Gianluca Mele: World Bank
Luca Sensini: DISA-MIS, University of Salerno

Eurasian Economic Review, 2023, vol. 13, issue 1, No 1, 33 pages

Abstract: Abstract In this paper, we investigate the effect of the corporate income tax (CIT) on firm performance in the Dominican Republic (DR) by focusing on both the national and regional levels. The analysis is based on data provided by the local authorities of the DR to the World Bank and comprises administrative CIT declarations by over 18,000 firms distributed across 31 provinces for the period from 2006 to 2015. We use propensity score matching method along with some opportunely selected financial indicators as proxies for firm performance. The overall results show that CIT incentives have a positive effect on growth and on most performance indicators; however, significant differences still arise between regions.

Keywords: Fiscal incentive; Corporate Income Tax; Regional studies; Propensity score matching (search for similar items in EconPapers)
JEL-codes: C01 O1 O2 O23 (search for similar items in EconPapers)
Date: 2023
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DOI: 10.1007/s40822-022-00223-7

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