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Corporate Tax Elasticities A Reader’s Guide to Empirical Findings

  • Ruud A. de Mooij


    (Erasmus University Rotterdam, CPB, CESifo, Tinbergen Institute, Oxford University Centre for Business Taxation)

  • Sjef Ederveen


    (Ministry of Economic Affairs, the Netherlands)

Corporate taxes exert a variety of effects on business behaviour. A wealth of empirical evidence assesses the magnitude of these behavioural margins of taxation. This article offers an up-to-date review and aims to provide common ground by computing for each distortion the semi-elasticity of the corporate tax base. We pay particular attention to international investment where it is not a priory clear whether marginal investment decisions or discrete locations are most important. Using an extension of the meta analysis of De Mooij and Ederveen (2003), we explore the extent to which existing studies reveal differences in effect size between the intensive and extensive margins of international investment.

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Paper provided by Oxford University Centre for Business Taxation in its series Working Papers with number 0822.

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Date of creation: 2008
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Handle: RePEc:btx:wpaper:0822
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  16. Rosanne Altshuler & Harry Grubert & T. Scott Newlon, 1998. "Has U.S. Investment Abroad Become More Sensitive to Tax Rates?," NBER Working Papers 6383, National Bureau of Economic Research, Inc.
  17. Buettner, Thiess, 2002. "The impact of taxes and public spending on the location of FDI: evidence from FDI-flows within Europe," ZEW Discussion Papers 02-17, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
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