Does Taxation Stifle Corporate Investment? Firm‐Level Evidence from ASEAN Countries

17 Pages Posted: 17 Sep 2018

See all articles by Serhan Cevik

Serhan Cevik

International Monetary Fund (IMF)

Fedor Miryugin

International Monetary Fund (IMF)

Multiple version iconThere are 2 versions of this paper

Date Written: September 2018

Abstract

This article conducts a firm‐level analysis of the effect of taxation on corporate investment, using large‐scale panel data on non‐financial firms over the period 1990–2014, and controlling for macrostructural differences among ASEAN countries. We find a significant degree of persistence in fixed investment over time, which varies with firm characteristics, such as size, growth prospects, profitability and leverage. The non‐linear estimations indicate that taxation facilitates business investment (possibly by enabling public investment in infrastructure and human capital, and the proper functioning of government institutions), but this effect turns negative and stifles private investment growth as the tax burden increases.

Suggested Citation

Cevik, Serhan and Miryugin, Fedor, Does Taxation Stifle Corporate Investment? Firm‐Level Evidence from ASEAN Countries (September 2018). Australian Economic Review, Vol. 51, Issue 3, pp. 351-367, 2018, Available at SSRN: https://ssrn.com/abstract=3244687 or http://dx.doi.org/10.1111/1467-8462.12267

Serhan Cevik (Contact Author)

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Fedor Miryugin

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

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