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The Impact Of Taxes On Trade Competitiveness

Author

Listed:
  • Stacie Beck

    (Department of Economics,University of Delaware)

  • Alexis Chaves

    (Bureau of Economic Analysis)

Abstract

Few macroeconomic studies exist on the effects of taxes on international trade. Our hypothesis is that higher tax rates raise a country’s production costs, leading to a decrease in exports in the long run. With panel data for 25 OECD countries, we use average effective tax rates on consumption, labor income and capital income to examine their impact on bilateral trade. We find that that all three types of taxes reduce the flow of international trade.

Suggested Citation

  • Stacie Beck & Alexis Chaves, 2011. "The Impact Of Taxes On Trade Competitiveness," Working Papers 11-09, University of Delaware, Department of Economics.
    • Handle: RePEc:dlw:wpaper:11-09.
    as

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    File URL: http://graduate.lerner.udel.edu/sites/default/files/ECON/PDFs/RePEc/dlw/WorkingPapers/2011/UDWP2011-09.pdf
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    References listed on IDEAS

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    Cited by:

    1. Stacie Beck & Alexis Chaves, 2011. "The Impacts of Various Taxes on Foreign Direct Investment," Working Papers 11-18, University of Delaware, Department of Economics.
    2. Ofori, Isaac Kwesi & Obeng, Camara Kwasi & Mwinlaaru, Yeltulme Pter, 2021. "Effect of Exchange Rate Volatility on Tax Revenue Performance In Sub-Saharan Africa," EconStor Preprints 233955, ZBW - Leibniz Information Centre for Economics.
    3. Halis Kıral & Lutfi Erden, 2018. "Bilateral trade effects of fiscal devaluation: Evidence from OECD countries," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 27(6), pages 585-606, August.
    4. Vdovychenko, Artem & Zubrytskyi, Artur, 2016. "Effects of fiscal consolidation on exports in Ukraine," MPRA Paper 70722, University Library of Munich, Germany, revised Feb 2016.

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    More about this item

    Keywords

    tax ratio; average effective tax rate; international trade;
    All these keywords.

    JEL classification:

    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
    • F10 - International Economics - - Trade - - - General
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models

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