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Large firms' responses to taxation

Corporate taxation is a key area of public policy. It governs tax revenues but also serves other objectives, such as attracting foreign investments or addressing externalitie (e.g., underinvestment in R&D or pollution). In such cases, Pigouvian taxes can help align incentives and maximize social welfare. However, the way businesses react to changes in their tax environment is poorly understood, especially at the microeconomic level. The project will examine the effects of several policy shocks on various variables to provide an estimation of their elasticity to taxation.