Tax Policy and Firm Entry and Exit Dynamics: Evidence from OECD Countries
In this paper we study the effects of reforms to corporate and personal income taxation on the rate of firm entry and exit using industry data for 19 OECD countries from 1998 to 2005. Using a difference-in-differences approach to correct for endogeneity bias we find that increases in corporate taxation affect entry but not exit. The effects of personal taxation depend upon the marginal tax rate that is altered. Increases in marginal tax rates applied at low income levels negatively affect entry and positively affect exit, whereas marginal tax reforms at higher income levels have the opposite effect.
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- Da Rin, M. & Di Giacomo, M. & Sembenelli, A., 2009.
"Corporate Taxation and the Size of New Firms : Evidence From Europe,"
2009-72, Tilburg University, Center for Economic Research.
- Marco Da Rin & Marina Di Giacomo & Alessandro Sembenelli, 2010. "Corporate Taxation and the Size of New Firms: Evidence from Europe," Journal of the European Economic Association, MIT Press, vol. 8(2-3), pages 606-616, 04-05.
- Da Rin, M. & Di Giacomo, M. & Sembenelli, A., 2010. "Corporate taxation and the size of new firms : Evidence from Europe," Other publications TiSEM 220989f9-77d5-4904-9a90-3, Tilburg University, School of Economics and Management.
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"Corporate taxation, incumbency advantage and entry,"
1996_12, York University, Department of Economics.
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- repec:ner:tilbur:urn:nbn:nl:ui:12-3607199 is not listed on IDEAS
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