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The Effect of Firm-Size Dependent Policies on the Economy: The Case of the Repecos Law in Mexico

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Author Info

  • Claudia Sánchez-Vela
  • Jorge N. Valero-Gil

Abstract

This paper analyzes the effects of a firm-size dependent law, on the Mexican economy which includes a small taxpayers' regime known in Mexico as the Repecos regime. It looks for effects on macroeconomic variables and on the industrial structure, on the proportion of small firms in the economy, which are originated in such regime. It uses a general equilibrium model calibrated on the U.S. economy and applies an environment of high taxes on labor and high tax evasion, characteristic of the Mexican economy, so that their effects can be distinguished from those of the Repecos regime.

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Bibliographic Info

Paper provided by Inter-American Development Bank in its series IDB Publications with number 80642.

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Date of creation: Feb 2011
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Handle: RePEc:idb:brikps:80642

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Related research

Keywords: Financial Sector; Small taxpayers; size distortions; Establishment size; Legal effects;

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Cited by:
  1. Chang-Tai Hsieh & Benjamin A. Olken, 2014. "The Missing "Missing Middle"," Journal of Economic Perspectives, American Economic Association, American Economic Association, vol. 28(3), pages 89-108, Summer.

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