This paper analyses the effect of home corporate taxes on a firm’s decision to expand the scale of its activity through exports using a rich data-set on Italian firms. Starting out from the observation that firms’ export activity vary greatly among them and tend to be systematically related to firm’s characteristics, we relate differences in firms’ export choices to firm level incidence of corporate taxes. Our results suggest that (i) corporate taxes matter at both the extensive and the intensive margin and (ii) higher corporate taxes may increase the probability of new firms’ entry in the foreign market while they decrease the export intensity of incumbent exporters.
Heterogeneous firms, corporate taxes and export behavior: A firm-level investigation for Italy
Daniela Federici;Valentino Parisi;Francesco Ferrante
2020-01-01
Abstract
This paper analyses the effect of home corporate taxes on a firm’s decision to expand the scale of its activity through exports using a rich data-set on Italian firms. Starting out from the observation that firms’ export activity vary greatly among them and tend to be systematically related to firm’s characteristics, we relate differences in firms’ export choices to firm level incidence of corporate taxes. Our results suggest that (i) corporate taxes matter at both the extensive and the intensive margin and (ii) higher corporate taxes may increase the probability of new firms’ entry in the foreign market while they decrease the export intensity of incumbent exporters.I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.
