Business, Management and Accounting
3 years ago

Corporate tax cuts boost investment and exports, fueling economic growth.

1 view
RePEc: Research Papers in Economics
Corporate taxes, investment and the self-financing rate: The effect of location decisions and exports
Thomas von Brasch, Ivan Frankovic, Eero Tölö

Paper Summary

Lowering corporate taxes can boost investment, especially when it attracts foreign firms and increases exports. A 1% cut in corporate tax rates leads to a 0.6% increase in investment, mainly driven by the link between foreign direct investment and exports. This investment boost can pay for the tax cut itself, but only if other countries don't also lower their corporate taxes. Norway's tax reform from 2014 to 2019 had positive effects on investment and employment.

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