The relationship between economic policy uncertainty and corporate tax rates
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Date
Authors
Clance, M.W. (Matthew)
Gozgor, Giray
Gupta, Rangan
Lau, Chi Keung Marco
Journal Title
Journal ISSN
Volume Title
Publisher
World Scientific Publishing
Abstract
This paper investigates the relationship between economic policy uncertainty and corporate tax rates in a panel dataset of 126 countries throughout 2003–2018. We use the so-called “World Uncertainty Index” to measure the level of economic policy uncertainty. We utilize various estimation techniques and find a one-way causality from economic policy uncertainty to corporate tax rates. Specifically, a rise in economic policy uncertainty leads to higher corporate tax rates. We also discuss potential implications.
Description
Keywords
Corporate taxation, Economic policy uncertainty (EPU), Uncertainty shocks, Business cycles, Panel data estimation techniques
Sustainable Development Goals
Citation
Clance, M., Gozgor, G., Gupta, R. et al. 2021, 'The relationship between economic policy uncertainty and corporate tax rates', Annals of Financial Economics, vol. 16, no. 1, art. 2150002.