Corporate taxation and productivity catch-up: evidence from European firms
This paper explores whether higher corporate tax rates reduce the speed with which small firms converge to the productivity frontier by lowering the after-tax returns to productivity-enhancing investments. Using data for 11 European countries we find evidence that their productivity catch-up is slow...
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| Format: | Article |
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Wiley
2016
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| Online Access: | https://eprints.nottingham.ac.uk/32941/ |
| _version_ | 1848794524577431552 |
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| author | Gemmell, Norman Kneller, Richard McGowan, Danny Sanz, Ismael Sanz-Sanz, José F. |
| author_facet | Gemmell, Norman Kneller, Richard McGowan, Danny Sanz, Ismael Sanz-Sanz, José F. |
| author_sort | Gemmell, Norman |
| building | Nottingham Research Data Repository |
| collection | Online Access |
| description | This paper explores whether higher corporate tax rates reduce the speed with which small firms converge to the productivity frontier by lowering the after-tax returns to productivity-enhancing investments. Using data for 11 European countries we find evidence that their productivity catch-up is slower the higher are statutory corporate tax rates. In contrast, we find large firms are instead affected by effective marginal rates. Using the reduced form model of productivity convergence due to Griffith et al. (2009) our results are robust to a host of robustness checks and a natural experiment that exploits the 2001 German tax reforms. |
| first_indexed | 2025-11-14T19:17:34Z |
| format | Article |
| id | nottingham-32941 |
| institution | University of Nottingham Malaysia Campus |
| institution_category | Local University |
| last_indexed | 2025-11-14T19:17:34Z |
| publishDate | 2016 |
| publisher | Wiley |
| recordtype | eprints |
| repository_type | Digital Repository |
| spelling | nottingham-329412020-05-04T18:00:58Z https://eprints.nottingham.ac.uk/32941/ Corporate taxation and productivity catch-up: evidence from European firms Gemmell, Norman Kneller, Richard McGowan, Danny Sanz, Ismael Sanz-Sanz, José F. This paper explores whether higher corporate tax rates reduce the speed with which small firms converge to the productivity frontier by lowering the after-tax returns to productivity-enhancing investments. Using data for 11 European countries we find evidence that their productivity catch-up is slower the higher are statutory corporate tax rates. In contrast, we find large firms are instead affected by effective marginal rates. Using the reduced form model of productivity convergence due to Griffith et al. (2009) our results are robust to a host of robustness checks and a natural experiment that exploits the 2001 German tax reforms. Wiley 2016-07-17 Article PeerReviewed Gemmell, Norman, Kneller, Richard, McGowan, Danny, Sanz, Ismael and Sanz-Sanz, José F. (2016) Corporate taxation and productivity catch-up: evidence from European firms. Scandinavian Journal of Economics . ISSN 1467-9442 Productivity; taxation; convergence http://onlinelibrary.wiley.com/doi/10.1111/sjoe.12212/abstract doi:10.1111/sjoe.12212 doi:10.1111/sjoe.12212 |
| spellingShingle | Productivity; taxation; convergence Gemmell, Norman Kneller, Richard McGowan, Danny Sanz, Ismael Sanz-Sanz, José F. Corporate taxation and productivity catch-up: evidence from European firms |
| title | Corporate taxation and productivity catch-up: evidence from European firms |
| title_full | Corporate taxation and productivity catch-up: evidence from European firms |
| title_fullStr | Corporate taxation and productivity catch-up: evidence from European firms |
| title_full_unstemmed | Corporate taxation and productivity catch-up: evidence from European firms |
| title_short | Corporate taxation and productivity catch-up: evidence from European firms |
| title_sort | corporate taxation and productivity catch-up: evidence from european firms |
| topic | Productivity; taxation; convergence |
| url | https://eprints.nottingham.ac.uk/32941/ https://eprints.nottingham.ac.uk/32941/ https://eprints.nottingham.ac.uk/32941/ |