Macroeconomic effects of corporate tax policy

Terry Shevlin, Lakshmanan Shivakumar, Oktay Urcan

Research output: Contribution to journalArticlepeer-review


Prior studies on the relation between corporate taxes and future macroeconomic growth present contradictory evidence. We argue this mixed evidence is at least partly due to the use of statutory corporate tax rates which ignore the complexity of tax exemptions, tax deductions, tax enforcement and firms’ tax planning. We propose an alternative tax rate measure that aggregates cash effective tax rates of listed firms, which reflect not only statutory tax rates, but also other features of the tax code, enforcement, and firms' tax planning. We find a strong robust negative relation between country-level effective tax rates and future macroeconomic growth.

Original languageEnglish (US)
Article number101233
JournalJournal of Accounting and Economics
Issue number1
StatePublished - Aug 2019


  • Corporate tax policy
  • Investment efficiency
  • Macroeconomic growth

ASJC Scopus subject areas

  • Accounting
  • Finance
  • Economics and Econometrics


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