How big are strategic spillovers from corporate tax competition?

Naitram, S. (2022) How big are strategic spillovers from corporate tax competition? Economic Inquiry, 60(2), pp. 847-869. (doi: 10.1111/ecin.13048)

Abstract

Strategic spillovers happen when one country's tax rate responds to tax cuts in other countries. My estimate of the size of strategic spillovers from corporate tax competition is one-third of the size of consensus estimates. A one percentage point cut in the foreign tax rate results in a 0.23 percentage point cut in the home tax rate. I use two novel identification strategies. First, I use bilateral foreign investment to define how one country matters to another. Second, I use only tax reforms—359 reforms across 76 countries. These identification strategies are derived from a model of corporate tax competition.

• Item Type: Articles
• Status: Published
• Refereed: Yes
• Glasgow Author(s) Enlighten ID: Naitram, Simon Miguel
• Authors: Naitram, S.
• College/School: College of Social Sciences > Adam Smith Business School
• Journal Name: Economic Inquiry
• Publisher: Wiley
• ISSN: 0095-2583
• ISSN (Online): 1465-7295
• Published Online: 06 November 2021