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Do fiscal policies affect the firms’ growth and performance? Urban versus rural area

Author

Listed:
  • Alessandra Amendola

    (University of Salerno)

  • Marinella Boccia

    (University of Salerno)

  • Gianluca Mele

    (World Bank)

  • Luca Sensini

    (DISA-MIS, University of Salerno)

Abstract

In this paper, we investigate the effect of the corporate income tax (CIT) on firm performance in the Dominican Republic (DR) by focusing on both the national and regional levels. The analysis is based on data provided by the local authorities of the DR to the World Bank and comprises administrative CIT declarations by over 18,000 firms distributed across 31 provinces for the period from 2006 to 2015. We use propensity score matching method along with some opportunely selected financial indicators as proxies for firm performance. The overall results show that CIT incentives have a positive effect on growth and on most performance indicators; however, significant differences still arise between regions.

Suggested Citation

  • Alessandra Amendola & Marinella Boccia & Gianluca Mele & Luca Sensini, 2023. "Do fiscal policies affect the firms’ growth and performance? Urban versus rural area," Eurasian Economic Review, Springer;Eurasia Business and Economics Society, vol. 13(1), pages 1-33, March.
    • Handle: RePEc:spr:eurase:v:13:y:2023:i:1:d:10.1007_s40822-022-00223-7
    DOI: 10.1007/s40822-022-00223-7
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    More about this item

    Keywords

    Fiscal incentive; Corporate Income Tax; Regional studies; Propensity score matching;
    All these keywords.

    JEL classification:

    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • O2 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy
    • O23 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Fiscal and Monetary Policy in Development
    • C01 - Mathematical and Quantitative Methods - - General - - - Econometrics

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