Ruiz, Fernando and Gerard, Marcel (2008): Is there evidence of strategic corporate tax interaction among EU countries?
Download (335Kb) | Preview
In this paper we empirically investigate whether EU countries set their corporate tax interdependently and, at the same time, we examine which space may be relevant in the construction of this association. Our findings indicate the presence of tax interdependency among the EU-15 in statutory and effective corporate taxes based on the tax codes. Moreover, corporate taxes in the EU-15 seem to suffer from common external shocks.
|Item Type:||MPRA Paper|
|Original Title:||Is there evidence of strategic corporate tax interaction among EU countries?|
|Keywords:||Tax mimicking; tax competition; spatial panel|
|Subjects:||H - Public Economics > H7 - State and Local Government; Intergovernmental Relations > H70 - General
H - Public Economics > H7 - State and Local Government; Intergovernmental Relations > H73 - Interjurisdictional Differentials and Their Effects
|Depositing User:||Fernando Ruiz|
|Date Deposited:||20. Aug 2008 02:48|
|Last Modified:||18. Feb 2013 15:37|
 R. Altshuler and T. Goodspeed. Follow the leader? Evidence on European and US tax competition. mimeo, 2002.
 J. Anderson and R. Wassmer. The decision to bid for business: Municipal behavior in granting property tax abatements. Regional Science and Urban Economics, 25:739—757, 1995.
 L. Anselin. Spatial Econometrics: Methods and Models. Kluwer Academic Publishers, 1988.
 L. Anselin, J. Le Gallo, and H. Jayet. Spatial Panel Econometrics, chapter 18.
 M. Artis and W. Zhang. Further evidence on the international business cycle and the ERM: Is there a European business cycle? Oxford Economic Papers, 51:120—131, 1999.
 J. Ashworth and B. Heyndels. The evolution of national tax structures in view of the EMU. In H. Ooghe, F. Heylen, R. Vennet, and J. Vermaut, editors, The Economic and Business Consequences of the EMU - A Challenge for Governments, Financial Institutions and Firms, pages 155—180. Kluwer Academic Publishers, 2000.
 J. Ashworth and B. Heyndels. Political fragmentation and the evolution of national tax structures in the OECD. International Tax and Public Finance, 8 (3):377—393, 2001.
 T. Besley and A. Case. Incumbent behavior: Vote-seeking, tax-setting and yardstick competition. The American Economic Review, 85(1):25—45, 1995.
 T. Besley, R. Griffith, and A. Klemm. Empirical evidence on fiscal interdependence in OECD countries. Mimeograph, 2001.
 M. Bordignon, F. Cerniglia, and F. Revelli. In search of yardstick competition: A spatial analysis of italian municipality property tax setting. Journal of Urban Economics, 54:199—217, 2003.
 C. Brett and J. Pinkse. The determinants of municipal tax rates of British Columbia. Canadian Journal of Economics, 33(3):695—714, 2000.
 J. Brueckner. Testing for strategic interaction among local governments: The case of growth controls. Journal of Urban Economics, 44(3):438—467, 1998.
 J. Brueckner. Strategic interaction among governments: An overview of empirical studies. Regional Science Review, 26:175—188, 2003.
 J. Brueckner and L. Saavedra. Do local governments engage in strategic property-tax competition? National Tax Journal, 54:203—229, 2001.
 S. Bucovetsky. Asymmetric tax competition. Journal of Urban Economics, 30(2):167—81, 1991.
 T. Buettner. Local business taxation and competition for capital: The choice of the tax rate. Regional Science and Urban Economics, 31:215—245, 2001.
 A. Case, H. Rosen, and J. Hines. Budget spillovers and fiscal policy interdependence. Journal of Public Economics, 52(3):285—307, 1993.
 S. Charlot and S. Paty. The french local tax setting: Do interactions and agglomeration forces matter? CESAER Working Paper, 11, 2005.
 European Commission. Company taxation in the internal market. Technical Report 582, European Commission, 2001.
 European Commission. Structures of the taxation systems in the European Union. Technical report, European Commission, 2003.
 M. Devereux, R. Griffith, and A. Klemm. Corporate income tax reforms and international tax competition. Economic Policy, 35:450—495, 2002.
 M. Devereux, B. Lockwood, and M. Redoano. Do countries compete over corporate tax rates? CEPR Discussion Paper, 3400, 2002.
 E. Dubois, M. Leprince, and S. Paty. Les déterminants politiques des choix fiscaux locaux. Revue de l’OFCE, 94:317—349, 2005.
 P. Elhorst. Specification and estimation of spatial panel data models. International Regional Science Review, 26 (3):244—268, 2003.
 A. Esteller-Moré and A. Solé-Ollé. Vertical income tax externalities and fiscal interdependence: Evidence from the US. Regional Science and Urban Economics, 31:247—272, 2001.
 L. Feld and E. Reulier. Strategic tax competition in Switzerland: Evidence from a panel of the Swiss cantons. CESIfo Working Paper, 1516, 2005.
 D. Figlio, V. Kolpin, and W. Reid. Do states play welfare games? Journal of Urban Economics, 46(3):437—454, 1999.
 G. Garrett. Global markets and national policies: Collision course or virtous cicle. International Organization, 52 (4):787—824, 1998.
 M. Hayashi and R. Boadway. An empirical analysis of intergovernmental tax interaction: The case of business income taxes in Canada. Canadian Journal of Economics, 34(2):481—503, 2001.
 B. Heyndels and J. Vuchelen. Tax mimicking among Belgian municipalities. National Tax Journal, 51(1):89—101, 1998.
 H. Jayet, S. Paty, and A. Pentel. Existe-t-il des interactions fiscales stratégiques entre les collectivités locales. Economie et Prévision, 154:95—105, 2002.
 H. Kelejian and I. Prucha. A generalized spatial two-stage least squares procedure for estimating a spatial autoregressive model with autoregressive disturbances. Journal of Real Estate Finance and Economics, 17(1):99—121, 1998.
 H. Kelejian and D. Robinson. A suggested method of estimation for spatial interdependent models with autocorrelated errors, and an application to a county expenditure model. Papers in Regional Science, 72(3):297—312, 1993.
 H. Ladd. Mimicking of local tax burdens among neighboring counties. Public Finance Quarterly, 20(4):450—467, 1992.
 M. Leprince, T. Maladiès, and S. Paty. Interactions fiscales verticales: Un test sur données départamentales. mimeo, 2005.
 M. Leprince, S. Paty, and E. Reulier. Choix d’imposition et interactions spatiales entre collectivités locales: Un test sur les départements français. Louvain Economic Review, 71(1):67—93, 2005.
 J. LeSage. Bayesian estimation of spatial autoregressive models. International Regional Science Review, 20:113—129, 1997.
 C. Martinez-Mongay. ECFIN’s effective tax rates. properties and comparisons with other tax indicators. ECFIN/593/00, 2000.
 G. Nicodème. Computing effective corporate tax rates: Comparisons and results. ECFIN E2/358/01, 2001.
 S. Paty. Le role des interactions dans les choix fiscaux des agglomerations françaises. Revue Française d’Economie, 20(3), 2006.
 D. Quinn. The correlates of change in international financial regulation. American Political Science Review, 91:531—551, 1997.
 M. Redoano. Fiscal interactions among european countries. Warwick Economic Research Papers, 680, 2003.
 F. Revelli. Spatial patterns in local taxation: Tax mimicking or error mimicking? Applied Economics, 33:1101—1107, 2001.
 F. Revelli. Reaction or interaction? Spatial process identification in multitiered government structures. Journal of Urban Economics, 53:29—53, 2003.
 D. Rodrik. Has Globalization Gone Too Far. Institute for International Economics, 1997.
 J. Rork. Coveting thy neighbors’ taxation. National Tax Journal, 56(4):775—787, 2003.
 F. Ruiz. Convergence de l’impôt sur les sociétés dans l’Union Européenne. Economie et Prévision, 173:79—96, 2006.
 F. Ruiz and M. Gérard. Summary, description, extensions of the capital income effective tax rate literature. In International Taxation Handbook, chapter 2, pages 11—42. Elsevier, 2007.
 J. Slemrod. Are corporate tax rates, or countries, converging? Journal of Public Economics, 88:1169—1186, 2004.
 A. Solé-Ollé. Electoral accountability and tax mimicking: The effects of electoral margins, coalition government, and ideology. European Journal of Political Economy, 19:685—713, 2003.
 P. Sorensen. Can capital income taxes survive? And should they? Presented at Venice Summer Institute, 2006.
 F. Stetzer. Specifying weights in spatial forecasting models: The results of some experiments. Environment and planning A, 14(5):571—584, 1982.
 D. Swank and S. Steinmo. The new political economy of taxation in advance capitalist democracies. American Journal of Political Science, 46 (3):671—692, 2002.
 J. Wilson. Theories of tax competition. National Tax Journal, 52:269—304, 1999.
 H. Winner. Hax tax competition emerged in OECD countries? Evidence from panel data. International Tax and Public Finance, 12 (5):667—687, 2005.