IDEAS home Printed from https://ideas.repec.org/p/wbk/wbrwps/10394.html
   My bibliography  Save this paper

Corporate Tax Rates, Allocative Efficiency, and Aggregate Productivity

Author

Listed:
  • Dinerstein,Marcos
  • Patino Pena,Fausto Andres

Abstract

This paper quantifies the impact of effective corporate tax rates on aggregate total factorproductivity. Using Chilean manufacturing data, the paper documents a large dispersion in the effective tax rate facedby firms and a mass of firms facing a 0 percent tax rate. These empirical patterns are incorporated into a standardmonopolistic competition model with corporate tax rates. The paper’s quantitative findings show that the TFP gainsbetween the economy implied by the Chilean tax code of 1998–2007 and a hypothetical economy without effectivecorporate tax rate inefficiencies are between 4 and 11 percent. The paper considers counterfactual policies inwhich all firms face the same tax rate and finds a monotonically decreasing relationship between the level ofthe tax rate and total factor productivity.

Suggested Citation

  • Dinerstein,Marcos & Patino Pena,Fausto Andres, 2023. "Corporate Tax Rates, Allocative Efficiency, and Aggregate Productivity," Policy Research Working Paper Series 10394, The World Bank.
    • Handle: RePEc:wbk:wbrwps:10394
    as

    Download full text from publisher

    File URL: http://documents.worldbank.org/curated/en/099243304062314372/pdf/IDU0f2d7762a0a06604da00b05d0c98a2b753b11.pdf
    Download Restriction: no
    ---><---

    More about this item

    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:wbk:wbrwps:10394. 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.

    We have no bibliographic references for this item. You can help adding them by using 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: Roula I. Yazigi (email available below). General contact details of provider: https://edirc.repec.org/data/dvewbus.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.