Is There Regional Tax Competition? Firm Level Evidence for Belgium

27 Pages Posted: 13 Jan 2005

See all articles by Karen Crabbe

Karen Crabbe

KU Leuven - Department of Economics

Boudewijn Janssen

KU Leuven - Department of Economics

Hylke Vandenbussche

Catholic University of Leuven (KUL), CEPR

Date Written: October 2004

Abstract

This is the first Paper that looks at regional tax competition within one single country. In many countries in Europe, regions within a country differ substantially in their economic development and attractiveness to firms. Belgium is a typical example of a country where the economic situation of its three regions is very different. Our findings are indicative of regional tax competition, with a lower Effective Tax Rate (ETR) in the peripheral region of Wallonia than in Flanders. In addition to location variables, our empirical model explaining firm level heterogeneity in ETRs includes firm characteristics, sector membership and variables capturing statutory tax breaks.

Keywords: Belgian firms, company accounts, effective tax rates

JEL Classification: C50, F36, H25

Suggested Citation

Crabbe, Karen and Janssen, Boudewijn and Vandenbussche, Hylke, Is There Regional Tax Competition? Firm Level Evidence for Belgium (October 2004). Available at SSRN: https://ssrn.com/abstract=646665

Karen Crabbe

KU Leuven - Department of Economics ( email )

Leuven, B-3000
Belgium

Boudewijn Janssen

KU Leuven - Department of Economics ( email )

Leuven, B-3000
Belgium

Hylke Vandenbussche (Contact Author)

Catholic University of Leuven (KUL), CEPR ( email )

Faculty of Economics
Naamsestraat 69
B-3000 Leuven, 3000
Belgium
+32 16 326 920 (Phone)
+32 16 326 732 (Fax)

HOME PAGE: https://www.sites.google.com/site/vandenbusschehylke/home-1

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