Firm mobility and jurisdictions’ tax rate choices: Evidence from immobile firm entry

Downward Revision of Investment Decisions after Corporate Tax Hikes

“…As the average revision ratio is 1, the estimates have to be divided by arcsinh(1) ≈ 0.88 to calculate the semi-elasticity.10 Municipalities are as likely to raise taxes in recessions as in normal times. The reasons why municipalities increase taxes (also in recession) are diverse, ranging from growing budget requirements to electoral cycles(Foremny and Riedel, 2014) and rent extraction(Langenmayr and Simmler, 2021); see also the discussion in Section 2.…”

Downward Revision of Investment Decisions after Corporate Tax Hikes

“…As the average revision ratio is 1, the estimates have to be divided by arcsinh(1) ≈ 0.88 to calculate the semi-elasticity.10 Municipalities are as likely to raise taxes in recessions as in normal times. The reasons why municipalities increase taxes (also in recession) are diverse, ranging from growing budget requirements to electoral cycles(Foremny and Riedel, 2014) and rent extraction(Langenmayr and Simmler, 2021); see also the discussion in Section 2.…”