EconPapers    
Economics at your fingertips  
 

Taxation and Bank Efficiency: Cross-Country Evidence

Chrysovalantis Gaganis (), Fotios Pasiouras and Angelos Tsaklanganos

International Journal of the Economics of Business, 2013, vol. 20, issue 2, 229-244

Abstract: This paper investigates the relationship between the effective tax rate on bank income and bank profit efficiency. Our sample consists of 3,472 observations from 533 publicly quoted commercial banks operating in 46 countries between 2001 and 2009. We estimate a global frontier while controlling for various country-specific characteristics such as regulations, macroeconomic conditions, market concentration, and financial and overall development. The results indicate that a higher tax rate results in higher pre-tax profit efficiency. However, the relationship is non-linear, indicating that there is a point after which a further increase in taxation reduces bank profit efficiency. We also find that concentration in the banking sector enhances the effect of taxation on profit efficiency. Overall, the results provide some support to the tax-shifting hypothesis. However, there is no robust evidence that the impact of taxation on profit efficiency is influenced by the extent of private monitoring.

Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3) Track citations by RSS feed

Downloads: (external link)
http://hdl.handle.net/10.1080/13571516.2013.782984 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:taf:ijecbs:v:20:y:2013:i:2:p:229-244

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/CIJB20

DOI: 10.1080/13571516.2013.782984

Access Statistics for this article

International Journal of the Economics of Business is currently edited by Eleanor Morgan

More articles in International Journal of the Economics of Business from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().

 
Page updated 2022-01-08
Handle: RePEc:taf:ijecbs:v:20:y:2013:i:2:p:229-244