Study of Effective Corporate Tax Rate and Its Influential Factors: Empirical Evidence from Emerging European Markets

This article examines the driving factors of the effective corporate tax rate (ECTR) for a sample of companies listed on five Eastern European stock exchanges (Romania, Hungary, Poland, Bulgaria, and Slovenia), covering the period 2000-2016. The empirical research covers variables regarding firm cha...

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Bibliographic Details
Published in:	Emerging markets finance & trade Vol. 54; no. 3; pp. 571 - 590
Main Authors:	Vintilă, Georgeta, Gherghina, Ştefan Cristian, Păunescu, Radu Alin
Format:	Journal Article
Language:	English
Published:	Abingdon Routledge 01-01-2018 Taylor & Francis, Ltd Taylor & Francis Ltd
Subjects:	Corporate taxes effective corporate tax rate firm characteristics Longitudinal studies panel data models Political power Tax rates
Online Access:	Get full text
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Summary:	This article examines the driving factors of the effective corporate tax rate (ECTR) for a sample of companies listed on five Eastern European stock exchanges (Romania, Hungary, Poland, Bulgaria, and Slovenia), covering the period 2000-2016. The empirical research covers variables regarding firm characteristics (e.g., profitability, efficiency of assets, indebtedness, liquidity, and solvency), firm-level controls, auditing fees, and the statutory rate. The estimated panel data models provide support for a positive link between the ECTR and profitability, debt, capital and inventory intensity, firm size, and statutory rate, strengthening the validity of political cost theory. Further, the negative link between market capitalization and assets growth supports the idea of political power theory.
ISSN:	1540-496X 1558-0938
DOI:	10.1080/1540496X.2017.1418317