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Journal Articles Public Choice Year : 2021

Taxation, infrastructure, and firm performance in developing countries

Abstract

This paper investigates the relationship between taxation and firm performance in developing countries. Combining firm-level data from the World Bank Enterprise Surveys and tax data from the Government Revenue Dataset, our results suggest that taxation benefits firm growth in developing countries, especially in lower-income countries. This positive contribution of domestic revenue to firm performance seems to channel through the financing of the public infrastructure vital to firms operating in these countries. We also provide evidence that this positive effect disappears when corruption is too pervasive, and when the source of tax revenue reduces government accountability.

Dates and versions

halshs-03231532 , version 1 (20-05-2021)

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Lisa Chauvet, Marin Ferry. Taxation, infrastructure, and firm performance in developing countries. Public Choice, 2021, 187, pp.455-480. ⟨10.1007/s11127-020-00788-4⟩. ⟨halshs-03231532⟩
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