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Corporate Taxation and Exports

  • Daniela Federici

    (University of Cassino)

  • Valentino Parisi

    (University of Cassino)

This paper analyses the relationship between corporate taxes and exports at firm level in Italy. We use an integrated dataset that combines for the period 2004-2006 survey data (Indagine sulle Imprese Manifatturiere) on enterprises and company accounts for the manufacturing sector to estimate a Probit and a Tobit model. Our results suggest that export participation as well as export intensity increase with corporate taxation. Consistently with recent developments of the corporate tax incidence theory in an open economy, this finding can be traced out to greater ability of exporting firms to shift the tax burden on international markets, compared to domestic firms. Calculation of the average and the marginal corporate tax rates uses the methodology recently developed by Egger et al. (2009) which allows deriving firm-specific effective corporate tax rates.

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Paper provided by Universita' di Cassino, Dipartimento di Scienze Economiche in its series Working Papers with number 2012-01.

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Length: 24 pages
Date of creation: Dec 2012
Date of revision:
Handle: RePEc:css:wpaper:2012-01
Contact details of provider: Postal: Dipartimento di Scienze Economiche Via S. Angelo Loc. Folcara 03043 Cassino (FR) - Italy
Phone: +3907762994734
Fax: +3907762994834
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  1. Peter Egger & Simon Loretz & Michael Pfaffermayr & Hannes Winner, 2008. "Firm-specific Forward-looking Effective Tax Rates," Working Papers 0811, Oxford University Centre for Business Taxation.
  2. Martina Lawless & Karl Whelan, 2008. "Where do firms export, how much, and why?," Working Papers 200821, School of Economics, University College Dublin.
  3. Elhanan Helpman & Marc Melitz & Yona Rubinstein, 2007. "Estimating Trade Flows: Trading Partners and Trading Volumes," NBER Working Papers 12927, National Bureau of Economic Research, Inc.
  4. Andrew B. Bernard & J. Bradford Jensen, 2001. "Why Some Firms Export," NBER Working Papers 8349, National Bureau of Economic Research, Inc.
  5. Andrew B. Bernard & J. Bradford Jensen & Stephen J. Redding & Peter K. Schott, 2007. "Firms in International Trade," Journal of Economic Perspectives, American Economic Association, vol. 21(3), pages 105-130, Summer.
  6. Sanghamitra Das & Mark J. Roberts & James R. Tybout, 2001. "Market entry costs, producer heterogeneity and export dynamics," Indian Statistical Institute, Planning Unit, New Delhi Discussion Papers 03-10, Indian Statistical Institute, New Delhi, India.
  7. Joachim Wagner, 2005. "Exports and Productivity: A survey of the evidence from firm level data," Working Paper Series in Economics 4, University of Lüneburg, Institute of Economics.
  8. Filippo Oropallo & Valentino Parisi, 2007. "Will Italy’s Tax Reform Reduce the Corporate Tax Burden? A Microsimulation Analysis," Rivista di statistica ufficiale, ISTAT - Italian National Institute of Statistics - (Rome, ITALY), vol. 9(1), pages 31-58, march.
  9. Luigi Benfratello & Fabio Schiantarelli & Alessandro Sembenelli, 2005. "Banks and Innovation: Microeconometric Evidence on Italian Firms," Boston College Working Papers in Economics 631, Boston College Department of Economics, revised 13 Jun 2007.
  10. Ronald B. Davies & Carsten Eckel, 2010. "Tax Competition for Heterogeneous Firms with Endogenous Entry," American Economic Journal: Economic Policy, American Economic Association, vol. 2(1), pages 77-102, February.
  11. Clougherty, Joseph A. & Zhang, Anming, 2008. "Domestic Rivalry and Export Performance: Theory and Evidence from International Airline Markets," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 225, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
  12. Jonathan Eaton & Samuel Kortum & Francis Kramarz, 2011. "An Anatomy of International Trade: Evidence From French Firms," Econometrica, Econometric Society, vol. 79(5), pages 1453-1498, 09.
  13. Melitz, Marc J, 2002. "The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity," CEPR Discussion Papers 3381, C.E.P.R. Discussion Papers.
  14. Alfredo Minerva & Lorenzo Casaburi & Valeria Gattai, 2008. "Firms’ International Status and Heterogeneity in Performance: Evidence From Italy," Working Papers 2008.3, Fondazione Eni Enrico Mattei.
  15. Bernard, Andrew B. & Bradford Jensen, J., 1999. "Exceptional exporter performance: cause, effect, or both?," Journal of International Economics, Elsevier, vol. 47(1), pages 1-25, February.
  16. Davide Castellani, 2002. "Export behavior and productivity growth: Evidence from Italian manufacturing firms," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 138(4), pages 605-628, December.
  17. Alessandro Sterlacchini, 2001. "The determinants of export performance: A firm-level study of Italian manufacturing," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 137(3), pages 450-472, September.
  18. Campa, Jose M., 2000. "Exchange rates and trade: How important is hysteresis in trade?," IESE Research Papers D/427, IESE Business School.
  19. Elhanan Helpman & Marc Melitz & Yona Rubinstein, 2008. "Estimating Trade Flows: Trading Partners and Trading Volumes," The Quarterly Journal of Economics, Oxford University Press, vol. 123(2), pages 441-487.
  20. Vicente Cunat & Andrea Caggese, 2011. "Financing Constraints, Firm Dynamics, Export Decisions, and Aggregate productivity," 2011 Meeting Papers 187, Society for Economic Dynamics.
  21. Boadway, Robin & Bruce, Neil, 1984. "A general proposition on the design of a neutral business tax," Journal of Public Economics, Elsevier, vol. 24(2), pages 231-239, July.
  22. Slemrod, Joel, 2004. "Are corporate tax rates, or countries, converging?," Journal of Public Economics, Elsevier, vol. 88(6), pages 1169-1186, June.
  23. Peter Egger & Simon Loretz, 2010. "Homogeneous Profit Tax Effects for Heterogeneous Firms?," The World Economy, Wiley Blackwell, vol. 33(8), pages 1023-1041, 08.
  24. Messere, Ken & de Kam, Flip & Heady, Christopher, 2003. "Tax Policy: Theory and Practice in OECD Countries," OUP Catalogue, Oxford University Press, number 9780199241484, July.
  25. Nguyen Hiep & Shoji Nishijima, 2009. "Export Intensity and Impacts from Firm Characteristics, Domestic Competition and Domestic Constraints in Vietnam: A Micro-data Analysis," Discussion Paper Series 238, Research Institute for Economics & Business Administration, Kobe University.
  26. Peter B. Clark & Shang-Jin Wei & Natalia T. Tamirisa & Azim M. Sadikov & Li Zeng, 2004. "A New Look at Exchange Rate Volatility and Trade Flows," IMF Occasional Papers 235, International Monetary Fund.
  27. Tiziano Razzolini & Davide Vannoni, 2011. "Export Premia and Subcontracting Discount: Passive Strategies and Performance in Domestic and Foreign Markets," The World Economy, Wiley Blackwell, vol. 34(6), pages 984-1013, 06.
  28. Michael Keen & Murtaza H. Syed, 2006. "Domestic Taxes and International Trade: Some Evidence," IMF Working Papers 06/47, International Monetary Fund.
  29. Ronald B. Davies & Carsten Eckel, 2007. "Tax Competition for Heterogeneous Firms with Endogenous Entry:The Case of Heterogeneous Fixed Costs," The Institute for International Integration Studies Discussion Paper Series iiisdp213, IIIS.
  30. repec:rtv:ceiswp:216 is not listed on IDEAS
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