Globalization and Corporate Taxation

 
Author/Editor: Kumar, Manmohan ; Quinn, Dennis
 
Publication Date: October 22, 2012
 
Electronic Access: Free Full text (PDF file size is 3,071KB).
Use the free Adobe Acrobat Reader to view this PDF file

 
Disclaimer: This Working Paper should not be reported as representing the views of the IMF. The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate
 
Summary: This paper analyzes the extent to which the degree of international economic integration, both financial and trade, affects corporate tax rates. It explores this issue in the context of strategic behavior by countries, taking into account other global and domestic political economy factors. Tax rates are analyzed using a unique tax dataset for advanced and developing economies extending over five decades. We report a number of novel results: there is no general negative relationship between financial globalization and corporate tax rates and revenues—results vary according to country grouping with OECD countries showing a positive relationship; the United States exhibits a “Stackelberg” type of leadership on other countries; trade integration is inversely correlated with tax rates; and public sentiment and ideology affect tax rates. The policy implications of these findings, particularly given budgetary pressures in the aftermath of the global crisis, are noted.
 
Series: Working Paper No. 12/252
Subject(s): Globalization | Economic integration | Trade integration | Corporate taxes | Tax revenues | Tax rates | Economic models

 
English
Publication Date: October 22, 2012
ISBN/ISSN: 9781557754752/2227-8885 Format: Paper
Stock No: WPIEA2012252 Pages: 49
Price:
US$18.00 (Academic Rate:
US$18.00 )
 
 
Please address any questions about this title to publications@imf.org