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Taking two steps to climb onto the stage: Capital taxes as link between trade and growth

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  • Bretschger, Lucas

Abstract

This contribution provides evidence for the hypothesis that trade increases growth through its curbing effect on capital taxes. The analyzed mechanism includes two different steps and considers the critical points of both the theoretical and empirical studies in this field. In particular, the estimation problems of omitted variables and parameter heterogeneity are addressed. Using panel data for a sample of 12 OECD countries in the time period 1967-1996, it is shown that the theoretical predictions can be corroborated by empirical results.

Suggested Citation

  • Bretschger, Lucas, 2001. "Taking two steps to climb onto the stage: Capital taxes as link between trade and growth," Wirtschaftswissenschaftliche Diskussionspapiere 05/2001, University of Greifswald, Faculty of Law and Economics.
    • Handle: RePEc:zbw:grewdp:052001
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    More about this item

    Keywords

    Trade and Growth; Tax Competition; OECD Countries;
    All these keywords.

    JEL classification:

    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue

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