Corporate Tax Stimulus and Investment in Colombia

Arturo Galindo and Marcela Meléndez Arjona

No 1716, IDB Publications (Working Papers) from Inter-American Development Bank

Abstract: This paper uses a yearly dataset of plant-level investment in Colombian firms during the period 1997 to 2007 to assess the impact of a tax incentive for firms that invest in fixed assets implemented in 2004. A positive and statistically significant correlation is found between the boom observed in investment and the adoption of the tax policy. However, the correlation vanishes when year-specific effects are controlled for. This result is robust to changes in the empirical specification, changes in estimation techniques, the inclusion of additional controls, and changes in the data set, among other tests. Overall, it is concluded that the tax stimulus analyzed was ineffective in promoting investment in Colombia.

Keywords: IDB-WP-173 (search for similar items in EconPapers)
JEL-codes: E22 H2 H20 H21 H22 H23 H24 H25 H26 H27 H29 O54 (search for similar items in EconPapers)
Date: 2010-04
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
https://publications.iadb.org/publications/english ... ment-in-Colombia.pdf (application/pdf)

Related works:
Working Paper: Corporate Tax Stimulus and Investment in Colombia (2010)
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:idb:brikps:1716

Access Statistics for this paper

More papers in IDB Publications (Working Papers) from Inter-American Development Bank Contact information at EDIRC.
Bibliographic data for series maintained by Felipe Herrera Library ().