The federal structure of Russia allows local authorities to determine independently some business taxes, thus opening up the opportunity to influence the business climate in order to attract mobile factors in economic development. This paper reveals the trends in the granting of regional tax exemptions and estimates their effects on the attraction of investment. The panel data embraces the characteristics of regional legislation and the indices of regional economic development for 72 regions over the period 1992–1998. The main conclusions of the study are: 1) regional investment legislation has an essential and positive impact on investment attraction, but can not itself be an engine of regional economic development; 2) the inter-regional diffusion of investment-related sub-federal laws has a tendency to increase the level of tax reliefs, as well as their period and flexibility; 3) more active in the adoption of investment legislation are those regional authorities that have higher estimations of the lack of investment and risk.
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Publisher Info
Paper provided by EERC Research Network, Russia and CIS in its series EERC Working Paper Series with number
2k-07e.
Length: 38 pages Date of creation: 04 Nov 2000 Date of revision: Handle: RePEc:eer:wpalle:2k-07e
Contact details of provider: Postal: EERC Research Network, Russia and CIS, 47, Nakhimovsky pr-t, suite 919, Moscow, 117418 Russia Phone: +7(095)332-4415 Fax: +1(202)478-1968 Web page: http://www.eerc.ru
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Find related papers by JEL classification: C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism R58 - Urban, Rural, and Regional Economics - - Regional Government Analysis - - - Regional Development Policy
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