The RSIT conducts research on policy-relevant topics in international taxation and cross-border activities of multinational companies. Below you will find a short summary of the most recent research projects. Please click on the right to get a full list of our publications and to download papers from our working paper series.
We generalize previous results on the effect of non-linear taxation on investment, showing that investment decisions are distorted when tax rates are correlated with marginal productivity. We demonstrate this result in a simple theoretical framework, which can also explain some well known results on the effects of tax progressivity and tax asymmetry on investment. Time-series estimates for the post-WW2 era suggest a negative correlation between effective tax rates and total factor productivity in the U.S., yielding an effect on firm investment equivalent to an investment subsidy of around 1 percent.
This paper studies the spillover effects of an anti-corruption measure. Using data on the universe of procurement contracts of Italian municipalities, the paper documents two responses. First, in sectors that are more vulnerable to corruption, neighboring municipalities increase the number of contracts smaller than a threshold that involves less stringent evidentiary requirements, making it more challenging to prove an infraction. In particular, neighboring municipalities avoid stricter procurement rules by splitting large projects into multiple below-threshold contracts. This response is stronger in municipalities with more senior and educated employees. Second, neighboring municipalities renegotiate fewer contracts of public works, a practice that signals the existence of corruption. Together, these results suggest that municipalities neighboring one where an anti-corruption measure is implemented respond by exploiting less monitored margins of the procurement activity, and engaging less in activities that signal potential irregularities.
This paper studies the effect of an increase in import competition on informality along two margins. I consider the extensive margin, where workers are hired by unregistered employers and the intensive margin, where even though jobs are carried out in registered firms, employees are off the books. Peru's relentless informal employment and its unprecedented trade-driven growth provides an ideal case study. Using a rich household survey, I find that exposure to trade impacts on informality through two competing and contrasting mechanisms. On the one hand, extensive-informal employment declines as unregistered employers shrink or exit due to their low productivity. On the other hand, intensive-informal employment rises as registered employers reduce costs by hiring informal workers. Furthermore, results suggest that the intensive margin drives the overall effect. Hence, I find that trade liberalisation increases informality.
This study provides a survey on corporate taxes around the world. Our analysis has three main objectives. First, we collect tax data and calculate (forward-looking) effective tax measures for a large sample of countries and recent years. We particularly describe how these measures vary over time and across countries, concluding that the majority of countries pursue so-called tax-cut-cum-base-broadening policies: most governments have significantly reduced their statutory tax rates on corporate income, while broadening the tax base through less attractive depreciation allowances. Second, we augment the country-level information with firm- and industry-level data (providing weights for financial structure and asset composition) to contrast statutory measures at the level of countries with measures accounting for firm- and industry-specific weights.