IDEAS home Printed from https://ideas.repec.org/p/pra/mprapa/33382.html
   My bibliography  Save this paper

The effect of globalization on capital taxation: What have we learned after 20 years of empirical studies?

Author

Listed:
  • Adam, Antonis
  • Kammas, Pantelis
  • Lagou, Athina

Abstract

This paper applies meta- regression analysis to the empirical literature that examines the impact of international market integration on capital taxation. The main objective is to explore whether particular data, model specification and estimation procedures exert systematic impact on the reported findings. Our results provide empirical evidence that differences across studies can be attributed to differences in the measurement of globalization. Moreover, in contrast to the conventional wisdom, study characteristics related to the measurement of the tax burden on capital appear to have an insignificant effect on the above mentioned relationship. Finally the meta- analysis fails to confirm a negative effect of globalization on the taxation of capital.

Suggested Citation

  • Adam, Antonis & Kammas, Pantelis & Lagou, Athina, 2011. "The effect of globalization on capital taxation: What have we learned after 20 years of empirical studies?," MPRA Paper 33382, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:33382
    as

    Download full text from publisher

    File URL: https://mpra.ub.uni-muenchen.de/33382/1/MPRA_paper_33382.pdf
    File Function: original version
    Download Restriction: no
    File URL: https://mpra.ub.uni-muenchen.de/38899/1/MPRA_paper_38899.pdf
    File Function: revised version
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Stanley, T.D. & Doucouliagos, Chris & Jarrell, Stephen B., 2008. "Meta-regression analysis as the socio-economics of economics research," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 37(1), pages 276-292, February.
    2. Bretschger, Lucas & Hettich, Frank, 2005. "Globalization and International Tax Competition: Empirical Evidence Based on Effective Tax Rates," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 20, pages 530-542.
    3. Persson, Torsten & Tabellini, Guido, 1995. "Double-edged incentives: Institutions and policy coordination," Handbook of International Economics, in: G. M. Grossman & K. Rogoff (ed.), Handbook of International Economics, edition 1, volume 3, chapter 38, pages 1973-2030, Elsevier.
    4. Andreas Haufler & Alexander Klemm & Guttorm Schjelderup, 2009. "Economic integration and the relationship between profit and wage taxes," Public Choice, Springer, vol. 138(3), pages 423-446, March.
    5. Mendoza, Enrique G. & Razin, Assaf & Tesar, Linda L., 1994. "Effective tax rates in macroeconomics: Cross-country estimates of tax rates on factor incomes and consumption," Journal of Monetary Economics, Elsevier, vol. 34(3), pages 297-323, December.
    6. Hannes Winner, 2005. "Has Tax Competition Emerged in OECD Countries? Evidence from Panel Data," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 12(5), pages 667-687, September.
    7. Dennis Quinn & Martin Schindler & A Maria Toyoda, 2011. "Assessing Measures of Financial Openness and Integration," IMF Economic Review, Palgrave Macmillan;International Monetary Fund, vol. 59(3), pages 488-522, August.
    8. Garrett, Geoffrey, 1998. "Global Markets and National Politics: Collision Course or Virtuous Circle?," International Organization, Cambridge University Press, vol. 52(4), pages 787-824, October.
    9. Michael Overesch & Johannes Rincke, 2009. "Competition from Low‐wage Countries and the Decline of Corporate Tax Rates: Evidence from European Integration," The World Economy, Wiley Blackwell, vol. 32(9), pages 1348-1364, September.
    10. Dani Rodrik, 1998. "Why Do More Open Economies Have Bigger Governments?," Journal of Political Economy, University of Chicago Press, vol. 106(5), pages 997-1032, October.
    11. Dreher, Axel, 2006. "The influence of globalization on taxes and social policy: An empirical analysis for OECD countries," European Journal of Political Economy, Elsevier, vol. 22(1), pages 179-201, March.
    12. Garrett, Geoffrey, 1995. "Capital mobility, trade, and the domestic politics of economic policy," International Organization, Cambridge University Press, vol. 49(4), pages 657-687, October.
    13. Wildasin, David E., 1988. "Nash equilibria in models of fiscal competition," Journal of Public Economics, Elsevier, vol. 35(2), pages 229-240, March.
    14. Torsten Persson & Guido Tabellini, 1992. "The Politics of 1992: Fiscal Policy and European Integration," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 59(4), pages 689-701.
    15. Lars P. Feld & Jost H. Heckemeyer, 2011. "Fdi And Taxation: A Meta‐Study," Journal of Economic Surveys, Wiley Blackwell, vol. 25(2), pages 233-272, April.
    16. Wilson, John Douglas, 1999. "Theories of Tax Competition," National Tax Journal, National Tax Association;National Tax Journal, vol. 52(2), pages 269-304, June.
    17. Devereux, Michael P. & Lockwood, Ben & Redoano, Michela, 2008. "Do countries compete over corporate tax rates?," Journal of Public Economics, Elsevier, vol. 92(5-6), pages 1210-1235, June.
    18. Bretschger, Lucas & Hettich, Frank, 2002. "Globalisation, capital mobility and tax competition: theory and evidence for OECD countries," European Journal of Political Economy, Elsevier, vol. 18(4), pages 695-716, November.
    19. Efendic, Adnan & Pugh, Geoff & Adnett, Nick, 2011. "Institutions and economic performance: A meta-regression analysis," European Journal of Political Economy, Elsevier, vol. 27(3), pages 586-599, September.
    20. T. D. Stanley, 2005. "Beyond Publication Bias," Journal of Economic Surveys, Wiley Blackwell, vol. 19(3), pages 309-345, July.
    21. Bretschger, Lucas, 2010. "Taxes, mobile capital, and economic dynamics in a globalizing world," Journal of Macroeconomics, Elsevier, vol. 32(2), pages 594-605, June.
    22. Jeroen Klomp & Jakob De Haan, 2010. "Inflation And Central Bank Independence: A Meta‐Regression Analysis," Journal of Economic Surveys, Wiley Blackwell, vol. 24(4), pages 593-621, September.
    23. Chris Doucouliagos, 2005. "Publication Bias in the Economic Freedom and Economic Growth Literature," Journal of Economic Surveys, Wiley Blackwell, vol. 19(3), pages 367-387, July.
    24. Doucouliagos, Hristos & Stanley, T. D., 2008. "Theory competition and selectivity: are all economic facts greatly exaggerated?," Working Papers eco_2008_06, Deakin University, Department of Economics.
    25. George R. Zodrow & Peter Mieszkowski, 2019. "Pigou, Tiebout, Property Taxation, and the Underprovision of Local Public Goods," World Scientific Book Chapters, in: George R Zodrow (ed.), TAXATION IN THEORY AND PRACTICE Selected Essays of George R. Zodrow, chapter 17, pages 525-542, World Scientific Publishing Co. Pte. Ltd..
    26. Wilson, John D., 1986. "A theory of interregional tax competition," Journal of Urban Economics, Elsevier, vol. 19(3), pages 296-315, May.
    27. Markus Leibrecht & Claudia Hochgatterer, 2012. "Tax Competition As A Cause Of Falling Corporate Income Tax Rates: A Survey Of Empirical Literature," Journal of Economic Surveys, Wiley Blackwell, vol. 26(4), pages 616-648, September.
    28. Clausing Kimberly A, 2008. "Closer Economic Integration and Corporate Tax Systems," Global Economy Journal, De Gruyter, vol. 8(2), pages 1-30, June.
    29. Torsten Persson, 1992. "Politics and economic policy," Discussion Paper / Institute for Empirical Macroeconomics 62, Federal Reserve Bank of Minneapolis.
    30. Dani Rodrik, 1998. "Has Globalization Gone Too Far?," Challenge, Taylor & Francis Journals, vol. 41(2), pages 81-94, March.
    31. Günther G. Schulze & Heinrich W. Ursprung, 1999. "Globalisation of the Economy and the Nation State," The World Economy, Wiley Blackwell, vol. 22(3), pages 295-352, May.
    32. Pantelis Kammas, 2011. "Strategic fiscal interaction among OECD countries," Public Choice, Springer, vol. 147(3), pages 459-480, June.
    33. Haufler,Andreas, 2008. "Taxation in a Global Economy," Cambridge Books, Cambridge University Press, number 9780521047593.
    34. Hristos Doucouliagos & T. D. Stanley, 2009. "Publication Selection Bias in Minimum‐Wage Research? A Meta‐Regression Analysis," British Journal of Industrial Relations, London School of Economics, vol. 47(2), pages 406-428, June.
    35. Quinn, Dennis, 1997. "The Correlates of Change in International Financial Regulation," American Political Science Review, Cambridge University Press, vol. 91(3), pages 531-551, September.
    36. Laura De Dominicis & Raymond J. G. M. Florax & Henri L. F. De Groot, 2008. "A Meta‐Analysis On The Relationship Between Income Inequality And Economic Growth," Scottish Journal of Political Economy, Scottish Economic Society, vol. 55(5), pages 654-682, November.
    37. Wilson, John Douglas & Wildasin, David E., 2004. "Capital tax competition: bane or boon," Journal of Public Economics, Elsevier, vol. 88(6), pages 1065-1091, June.
    38. Duane Swank, 1998. "Funding the Welfare State: Globalization and the Taxation of Business in Advanced Market Economies," Political Studies, Political Studies Association, vol. 46(4), pages 671-692, September.
    39. Antonis Adam & Pantelis Kammas, 2007. "Tax policies in a globalized world: Is it politics after all?," Public Choice, Springer, vol. 133(3), pages 321-341, December.
    40. Bruno Coric & Geoff Pugh, 2010. "The effects of exchange rate variability on international trade: a meta-regression analysis," Applied Economics, Taylor & Francis Journals, vol. 42(20), pages 2631-2644.
    41. Lawrence Kenny & Stanley Winer, 2006. "Tax Systems in the World: An Empirical Investigation into the Importance of Tax Bases, Administration Costs, Scale and Political Regime," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 13(2), pages 181-215, May.
    42. Michael P. Devereux & Rachel Griffith & Alexander Klemm, 2002. "Corporate income tax reforms and international tax competition [‘Do domestic firms benefit from direct foreign investment? Evidence from Venezuela’]," Economic Policy, CEPR, CESifo, Sciences Po;CES;MSH, vol. 17(35), pages 449-495.
    43. Daryl Pregibon, 1980. "Goodness of Link Tests for Generalized Linear Models," Journal of the Royal Statistical Society Series C, Royal Statistical Society, vol. 29(1), pages 15-24, March.
    44. Wilson, John Douglas, 1999. "Theories of Tax Competition," National Tax Journal, National Tax Association, vol. 52(n. 2), pages 269-304, June.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Michael P. Devereux & Simon Loretz, 2013. "What Do We Know About Corporate Tax Competition?," National Tax Journal, National Tax Association;National Tax Journal, vol. 66(3), pages 745-774, September.
    2. Pantelis Kammas, 2011. "Strategic fiscal interaction among OECD countries," Public Choice, Springer, vol. 147(3), pages 459-480, June.
    3. Hans Pitlik, 2005. "Folgt die Steuerpolitik in der EU der Logik des Steuerwettbewerbs," Diskussionspapiere aus dem Institut für Volkswirtschaftslehre der Universität Hohenheim 256/2005, Department of Economics, University of Hohenheim, Germany.
    4. Troeger, Vera, 2012. "De Facto Capital Mobility, Equality, and Tax Policy in Open Economies," CAGE Online Working Paper Series 84, Competitive Advantage in the Global Economy (CAGE).
    5. Hannes Winner, 2005. "Has Tax Competition Emerged in OECD Countries? Evidence from Panel Data," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 12(5), pages 667-687, September.
    6. Osterloh, Steffen & Debus, Marc, 2012. "Partisan politics in corporate taxation," European Journal of Political Economy, Elsevier, vol. 28(2), pages 192-207.
    7. Andreas Haufler & Alexander Klemm & Guttorm Schjelderup, 2009. "Economic integration and the relationship between profit and wage taxes," Public Choice, Springer, vol. 138(3), pages 423-446, March.
    8. Osterloh, Steffen & Debus, Marc, 2009. "Partisan politics in corporate tax competition," ZEW Discussion Papers 09-078, ZEW - Leibniz Centre for European Economic Research.
    9. Markus Leibrecht & Claudia Hochgatterer, 2012. "Tax Competition As A Cause Of Falling Corporate Income Tax Rates: A Survey Of Empirical Literature," Journal of Economic Surveys, Wiley Blackwell, vol. 26(4), pages 616-648, September.
    10. Heimberger, Philipp, 2021. "Corporate tax competition: A meta-analysis," European Journal of Political Economy, Elsevier, vol. 69(C).
    11. Åsa Hansson & Susan Porter & Susan Williams, 2015. "The importance of the political process on corporate tax policy," Constitutional Political Economy, Springer, vol. 26(3), pages 281-306, September.
    12. Hansson, Åsa & Porter, Susan & Perry Williams, Susan, 2012. "The Effect of Political and Economic Factors on Corporate Tax Rates," Working Paper Series 942, Research Institute of Industrial Economics.
    13. Haufler, Andreas & Klemm, Alexander & Schjelderup, Guttorm, 2006. "Globalisation and the mix of wage and profit taxes," Discussion Papers in Economics 885, University of Munich, Department of Economics.
    14. Hannes Winner, 2012. "Fiscal Competition and the Composition of Public Expenditure: An Empirical Study," Contemporary Economics, University of Economics and Human Sciences in Warsaw., vol. 6(3), September.
    15. Lockwood, Ben & Makris, Miltiadis, 2006. "Tax incidence, majority voting and capital market integration," Journal of Public Economics, Elsevier, vol. 90(6-7), pages 1007-1025, August.
    16. Anton Jevcak, 2005. "The Role of Symmetry between the Revenue and the Expenditure Side of the Government Budget in the Debate about the Potential Negative Effects of Tax Competition," Economic Change and Restructuring, Springer, vol. 37(3), pages 195-201, September.
    17. Gaëtan Nicodème, 2006. "Corporate tax competition and coordination in the European Union: What do we know? Where do we stand?," European Economy - Economic Papers 2008 - 2015 250, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
    18. Antonio Sciala' & Paolo Liberati, 2008. "The impact of economic openness on the vertical structure of the public sector," "Marco Fanno" Working Papers 0085, Dipartimento di Scienze Economiche "Marco Fanno".
    19. Yu-Bong Lai, 2014. "Asymmetric tax competition in the presence of lobbying," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 21(1), pages 66-86, February.
    20. König, Tobias & Wagener, Andreas, 2008. "(Post-)Materialist Attitudes and the Mix of Capital and Labour Taxation," Hannover Economic Papers (HEP) dp-404, Leibniz Universität Hannover, Wirtschaftswissenschaftliche Fakultät.

    More about this item

    Keywords

    capital mobility; tax competition; Meta analysis;
    All these keywords.

    JEL classification:

    • H4 - Public Economics - - Publicly Provided Goods
    • F2 - International Economics - - International Factor Movements and International Business
    • H2 - Public Economics - - Taxation, Subsidies, and Revenue

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:33382. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Joachim Winter (email available below). General contact details of provider: https://edirc.repec.org/data/vfmunde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.