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The Effects of Countercyclical Fiscal Policy: Firm Level Evidence from Temporary Consumption Tax Cuts in Turkey

Atılım Seymen and Florian Misch

VfS Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order from Verein für Socialpolitik / German Economic Association

Abstract: The paper investigates the effects of temporary consumption tax cuts using firm-level data. As part of its countercyclical measures implemented during the recent global economic crisis, Tur-key temporarily lowered consumption taxes on selected durables. Our empirical strategy ex-ploits variation in firm exposure to the tax cut which allows us to control for unobserved indus-try- and region-specific shocks to address potential endogeneity. Using data on the change of sales of firms that benefited from this measure and of those that did not over different periods, we find positive and robust effects of consumption tax cuts on the change of firm sales which is consistent with theoretical predictions.

JEL-codes: E32 E62 H20 (search for similar items in EconPapers)
Date: 2013
New Economics Papers: this item is included in nep-ara, nep-mac and nep-pbe
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Citations: View citations in EconPapers (1) Track citations by RSS feed

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Working Paper: The effects of countercyclical fiscal policy: Firm-level evidence from temporary consumption tax cuts in Turkey (2012) Downloads
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