Do Corporate Tax Cuts Boost Economic Growth?


Sebastian Gechert and Philipp Heimberger

wiiw Working Paper No. 201, June 2021
44 pages including 6 Tables and 4 Figures

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The empirical literature on the impact of corporate taxes on economic growth reaches ambiguous conclusions: corporate tax cuts increase, reduce, or do not significantly affect growth. We apply meta-regression methods to a novel dataset with 441 estimates from 42 primary studies. There is evidence for publication selectivity in favour of reporting growth-enhancing effects of corporate tax cuts. Correcting for this bias, we cannot reject the hypothesis of a zero effect of corporate taxes on growth. Several factors influence reported estimates, including researcher choices concerning the measurement of growth and corporate taxes, and controlling for other budgetary components.


Keywords: Corporate income taxes, economic growth, meta-analysis

JEL classification: E60; H25; O40

Countries covered: Asia, CEE, CIS, East Asia, European Union, New EU Member States, OECD, SEE, Wider Europe

Research Areas: Macroeconomic Analysis and Policy