The impact of state personal and corporate tax rates on firm location

Mark Gius and Phillip Frese

Applied Economics Letters, 2002, vol. 9, issue 1, 47-49

Abstract: The present study attempts to determine the effect of state personal and corporate tax rates on firm location at the 2-digit SIC level. Using a random effects model on a data set of 14000 observations, the present study finds that a state's personal tax rate has a negative effect on firm location but that a state's corporate tax rate has no statistically-significant effect on firm location. These results suggest that the locational decision of a firm is affected more by the impact that high personal taxes will have on the manager's and/or owner's income than by the negative impact of high corporate tax rates on firm profits.

Date: 2002
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Citations: View citations in EconPapers (6)

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DOI: 10.1080/13504850110046859

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