The effects of corporate income taxation on real investment - replication dataset

Published: 4 October 2021| Version 1 | DOI: 10.17632/5ynyk2w435.1
Thomas Goda


Replication dataset for "The effects of corporate income taxation on real investment: Cross-country evidence" Abstract It is debated to what extent corporate taxation discourages capital formation, and the related empirical cross-country evidence is inconclusive. This paper provides new insights into this matter for a large sample of advanced and developing countries. In a first step, national accounts data is used to calculate backward-looking effective corporate income tax rates (ECTR) for 77 countries during 1995-2018. In a second step, dynamic panel data regressions are employed to estimate the impact of ECTR on corporate investment. The main findings of this exercise are that statutory corporate income tax rates, on average, are twice as high as ECTR, average ECTR have been relatively stable but show distinct dynamics across countries, and there exists no significant negative relationship between ECTR and corporate investment. The latter finding is robust when, alternatively, publicly available forward-looking effective tax rate measures are considered. The regression results indicate moreover that real investment is persistent over time and is mainly driven by economic growth.


Steps to reproduce

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Universidad EAFIT Escuela de Economia y Finanzas


Investment, Taxation, Aggregate Investment, Business Tax