IDEAS home Printed from https://ideas.repec.org/a/rfe/zbefri/v41y2023i2p391-425.html
   My bibliography  Save this article

Linear determinants of the effective tax burden of ICT companies in the Republic of Croatia

Author

Listed:
  • Marijana Bubaniæ

    (University of Zagreb, Faculty of Organization and Informatics Varaždin, Varaždin, Croatia)

Abstract

The actual tax burden of a company often differs from that prescribed by law, but there are also differences among the companies themselves. The question arises whether there are systematic explanations for these differences and whether they can be related to the type of business activity, asset structure, debt and other determinants. Therefore, the main objective of the research is to identify the determinants of the effective tax burden of ICT companies in the Republic of Croatia. The time horizon includes companies from the section J information and communication (NACE Rev. 2), in the period from 2008 to 2016. Using an unbalanced sample and dynamic panel regression with the Arellano-Bover/Blundell-Bond estimator, the determinants of the effective tax burden identified were as follows: effective tax burden from the previous period, company size, debt, capital and labor intensity, inventory intensity, profitability, and business cycles. However, the determinants differ according to the size classes of the company and the divisions. Compared to previous research, the subject is focused on companies of all sizes, not only large companies including not only listed companies but all companies in an industry that contributes to the homogeneity of the sample and the reliability of the results.

Suggested Citation

  • Marijana Bubaniæ, 2023. "Linear determinants of the effective tax burden of ICT companies in the Republic of Croatia," Zbornik radova Ekonomskog fakulteta u Rijeci/Proceedings of Rijeka Faculty of Economics, University of Rijeka, Faculty of Economics and Business, vol. 41(2), pages 391-425.
    • Handle: RePEc:rfe:zbefri:v:41:y:2023:i:2:p:391-425
    as

    Download full text from publisher

    File URL: https://www.efri.uniri.hr/upload/01-Bubanic-2023-2.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Zimmerman, Jerold L., 1983. "Taxes and firm size," Journal of Accounting and Economics, Elsevier, vol. 5(1), pages 119-149, April.
    2. Arellano, Manuel & Bover, Olympia, 1995. "Another look at the instrumental variable estimation of error-components models," Journal of Econometrics, Elsevier, vol. 68(1), pages 29-51, July.
    3. Bretschger, Lucas & Hettich, Frank, 2002. "Globalisation, capital mobility and tax competition: theory and evidence for OECD countries," European Journal of Political Economy, Elsevier, vol. 18(4), pages 695-716, November.
    4. Gupta, Sanjay & Newberry, Kaye, 1997. "Determinants of the variability in corporate effective tax rates: Evidence from longitudinal data," Journal of Accounting and Public Policy, Elsevier, vol. 16(1), pages 1-34.
    5. Yong-Ching Chiou & Yao-Chih Hsieh & Wenyi Lin, 2014. "Determinants of effective tax rates for firms listed on Chinese stock market: Panel models with two-sided censors," Journal of Economic and Financial Studies (JEFS), LAR Center Press, vol. 2(5), pages 1-5, October.
    6. Georgeta Vintilă & Ştefan Cristian Gherghina & Radu Alin Păunescu, 2018. "Study of Effective Corporate Tax Rate and Its Influential Factors: Empirical Evidence from Emerging European Markets," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 54(3), pages 571-590, February.
    7. Manuel Arellano & Stephen Bond, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 58(2), pages 277-297.
    8. Michael P. Devereux & Rachel Griffith & Alexander Klemm, 2002. "Corporate income tax reforms and international tax competition [‘Do domestic firms benefit from direct foreign investment? Evidence from Venezuela’]," Economic Policy, CEPR, CESifo, Sciences Po;CES;MSH, vol. 17(35), pages 449-495.
    9. repec:mir:mireco:v:1:y:2014:i:5:p:1-6 is not listed on IDEAS
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Özlem Onaran & Valerie Boesch, 2014. "The Effect of Globalization on the Distribution of Taxes and Social Expenditures in Europe: Do Welfare State Regimes Matter?," Environment and Planning A, , vol. 46(2), pages 373-397, February.
    2. Cassette, Aurélie & Paty, Sonia, 2008. "Tax competition among Eastern and Western European countries: With whom do countries compete?," Economic Systems, Elsevier, vol. 32(4), pages 307-325, December.
    3. Tuba DERYA-BASKAN & Eda BALIKÇIOĞLU, 2018. "Firma Bileşenlerinin Halka Açık Perakende Firmalarında Kurumlar Vergisine Etkisi," Sosyoekonomi Journal, Sosyoekonomi Society, issue 26(37).
    4. Alexander Klemm & Stefan Parys, 2012. "Empirical evidence on the effects of tax incentives," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 19(3), pages 393-423, June.
    5. Mark N. Harris & Simon Feeny, 2000. "Habit Persistence in Effective Tax Rates: Evidence Using Australian Tax Entities," Melbourne Institute Working Paper Series wp2000n13, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
    6. Ferdi Celikay, 2020. "Dimensions of tax burden: a review on OECD countries," Journal of Economics, Finance and Administrative Science, Emerald Group Publishing Limited, vol. 25(49), pages 27-43, March.
    7. Vo, Xuan Vinh & Daly, Kevin James, 2007. "The determinants of international financial integration," Global Finance Journal, Elsevier, vol. 18(2), pages 228-250.
    8. Elena Fernández-Rodríguez & Roberto García-Fernández & Antonio Martínez-Arias, 2019. "Influence of Ownership Structure on the Determinants of Effective Tax Rates of Spanish Companies," Sustainability, MDPI, vol. 11(5), pages 1-19, March.
    9. M. Shanmugam, 2020. "Research and Development Intensity and Effective Tax Rate: Empirical Evidence from India," Emerging Economy Studies, International Management Institute, vol. 6(2), pages 223-234, November.
    10. Minnick, Kristina & Noga, Tracy, 2017. "The influence of firm and industry political spending on tax management among S&P 500 firms," Journal of Corporate Finance, Elsevier, vol. 44(C), pages 233-254.
    11. Dackehag, Margareta & Hansson, Åsa, 2015. "Taxation of Dividend Income and Economic Growth: The Case of Europe," Working Paper Series 1081, Research Institute of Industrial Economics.
    12. Salihu, Ibrahim Aramide & Annuar, Hairul Azlan & Sheikh Obid, Siti Normala, 2015. "Foreign investors' interests and corporate tax avoidance: Evidence from an emerging economy," Journal of Contemporary Accounting and Economics, Elsevier, vol. 11(2), pages 138-147.
    13. Minnick, Kristina & Noga, Tracy, 2010. "Do corporate governance characteristics influence tax management?," Journal of Corporate Finance, Elsevier, vol. 16(5), pages 703-718, December.
    14. Hannes Winner, 2005. "Has Tax Competition Emerged in OECD Countries? Evidence from Panel Data," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 12(5), pages 667-687, September.
    15. Woon Leong Lin, 2021. "Giving too much and paying too little? The effect of corporate social responsibility on corporate lobbying efficacy: Evidence of tax aggressiveness," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 28(2), pages 908-924, March.
    16. Mauro Ghinamo & Paolo Panteghini & Federico Revelli, 2010. "FDI determination and corporate tax competition in a volatile world," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 17(5), pages 532-555, October.
    17. Daniel Ştefan Armeanu & Georgeta Vintilă & Ştefan Cristian Gherghina, 2017. "Empirical Study towards the Drivers of Sustainable Economic Growth in EU-28 Countries," Sustainability, MDPI, vol. 10(1), pages 1-22, December.
    18. Youngho Kang & Byung-Yeon Kim, 2018. "Immigration and economic growth: do origin and destination matter?," Applied Economics, Taylor & Francis Journals, vol. 50(46), pages 4968-4984, October.
    19. Cho, Seo-young & Vadlamannati, Krishna Chaitanya, 2010. "Compliance for big brothers: An empirical analysis on the impact of the anti-trafficking protocol," University of Göttingen Working Papers in Economics 118, University of Goettingen, Department of Economics.
    20. Vieira, Flávio & MacDonald, Ronald & Damasceno, Aderbal, 2012. "The role of institutions in cross-section income and panel data growth models: A deeper investigation on the weakness and proliferation of instruments," Journal of Comparative Economics, Elsevier, vol. 40(1), pages 127-140.

    More about this item

    Keywords

    effective tax burden; ICT activity; dynamic panel regression;
    All these keywords.

    JEL classification:

    • H2 - Public Economics - - Taxation, Subsidies, and Revenue
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:rfe:zbefri:v:41:y:2023:i:2:p:391-425. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Danijela Ujcic (email available below). General contact details of provider: https://edirc.repec.org/data/efrijhr.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.