Tax credit, exports and regional disparity: Microevidence from Hungary

Gábor Békés, P Harasztosi

    Research output: Working paper/PreprintWorking paper

    Abstract (may include machine translation)

    Hungary applied a generous corporate tax credit scheme for the 1998-2000 period. Over 40% of all manufacturing firms received subsidy by applying a deduction from its payable corporate tax. As the tax credit was related to investment, firms could use these funds to expand into foreign markets. Using a new firm level data from Hungary, with direct information on tax credit use, we investigate how this tax credit affected entry into exporting. We find that a firm is about 4% more likely to start exporting if it had received a tax credit. In terms of the policy’s regional impact, we find that the impact of tax credit regarding export market entry is not strongly dependent on regional disparity.
    Original languageEnglish
    PublisherEuropean firms in a global economy (EFIGE)
    Number of pages19
    StatePublished - 2012

    Publication series

    NameEFIGE Working paper ; 56.

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