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Institutional determinants of the effective tax rate in G7 and BRIC countries

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  • Fernández-Rodríguez, Elena
  • García-Fernández, Roberto
  • Martínez-Arias, Antonio

Abstract

This paper studies the relationship between the corporate effective tax rate (ETR) and several institutional factors in the G7 and the BRIC countries (Brazil, Russia, India, and China). We use the panel data methodology with a data sample of 25,878 listed firms in 2010–2018. The results show that all the variables analyzed have an effect on the ETR. Some—such as the statutory tax rate, government effectiveness, regulatory quality, rule of law, and open markets—affect all countries, whereas others, such as corruption control and economic freedom, affect only the BRIC countries, and gross domestic product growth, the deficit, and gross debt only affect the G7 countries.

Suggested Citation

  • Fernández-Rodríguez, Elena & García-Fernández, Roberto & Martínez-Arias, Antonio, 2023. "Institutional determinants of the effective tax rate in G7 and BRIC countries," Economic Systems, Elsevier, vol. 47(2).
    • Handle: RePEc:eee:ecosys:v:47:y:2023:i:2:s0939362523000080
    DOI: 10.1016/j.ecosys.2023.101079
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    More about this item

    Keywords

    BRIC; Effective tax rate (ETR); G7; Institutional environment;
    All these keywords.

    JEL classification:

    • H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies
    • H32 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Firm
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting
    • O57 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries

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