Global Tax Research Initiative
New Global Evidence Platform

Understanding Corporate Tax Responsiveness

A global research collaboration mapping firm behavior, tax policy frictions, and efficiency impacts across countries.

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Study Countries
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MVPF Estimates
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Country Tax Systems

Each country has unique tax system characteristics that influence corporate responsiveness. The corporate elasticity of taxable income (ETI) summarizes how strongly firms adjust reported income when tax rates change. Higher ETI values indicate larger behavioral responses, while lower values imply more muted responses.

ETI Database

Browse estimates from our study partners and predicted elasticities for countries worldwide

Why Corporate Tax Elasticity Matters

The elasticity of taxable income (ETI) measures how firms adjust their reported taxable income in response to changes in tax rates. This fundamental parameter helps policymakers understand both the efficiency costs and revenue implications of corporate tax reforms.

A higher elasticity means firms are more responsive to tax incentives -- they may invest less, shift profits, or change their business structures more readily when faced with rate changes. Understanding these behavioral responses is crucial for designing effective tax policy.

Our research shows elasticities range from 0.08 to 1.9 across countries, implying that identical tax reforms can generate sharply different behavioral and revenue responses.

Study Countries (Administrative Data)

We use administrative data and a unified bunching estimator to estimate these elasticities. See The Elasticity of Taxable Income Across Countries for details.

Country Elasticity

Global Predicted Elasticities

We use machine learning approaches together with our elasticity estimates to predict elasticities for countries with adequate data from the Oxford University Centre for Business Taxation, Orbis, and the World Bank.

Country Predicted ETI

Cost Benefit Analysis

We calculate the Marginal Value of Public Funds (MVPF) for a marginal corporate tax cut. The MVPF measures how economic value is generated for each dollar of government revenue lost. Countries with larger elasticities face larger efficiency costs and benefit more from lowering their corporate tax rate, resulting in higher MVPFs. Country-level MVPFs are computed using our predicted elasticities together with effective corporate tax rates from the Oxford University Centre for Business Taxation (reported below). These rates reflect effective, rather than statutory or necessarily current, corporate tax burdens. These calculations follow the framework developed by Hendren and Spring-Keyser, "A Unified Welfare Analysis of Government Policies".

Country MVPF Elasticity ETR

About

We collaborate with researchers and tax authorities to build comparable evidence on how corporate tax policy shapes firm behavior.

Claudio Agostini

Claudio Agostini

Research Collaborator

Zareh Asatryan

Zareh Asatryan

Research Collaborator

Laurent Bach

Laurent Bach

Research Collaborator

Govinda Bernier

Govinda Bernier

Research Collaborator

Marinho Bertanha

Marinho Bertanha

Research Collaborator

Katarzyna Bilicka

Katarzyna Bilicka

Research Collaborator

Anne Brockmeyer

Anne Brockmeyer

Research Collaborator

Guillermo Falcone

Guillermo Falcone

Research Collaborator

Pablo Garriga

Pablo Garriga

Research Collaborator

Petr Jansky

Petr Jansky

Research Collaborator

Tomas Lichard

Tomas Lichard

Research Collaborator

Jan Palguta

Jan Palguta

Research Collaborator

Elena Patel

Elena Patel

Research Collaborator

Joao Pereira dos Santos

Joao Pereira dos Santos

Research Collaborator

Thomas Schwab

Thomas Schwab

Research Collaborator

Nathan Seegert

Nathan Seegert

Research Collaborator

Oliver Skultety

Oliver Skultety

Research Collaborator

Kristina Strohmaier

Kristina Strohmaier

Research Collaborator

Max Todtenhaupt

Max Todtenhaupt

Research Collaborator

Guillermo Vuletin

Guillermo Vuletin

Research Collaborator

JB

Jaroslav Bukovina

Research Collaborator

YH

Yuxuan He

Research Collaborator

EK

Evangelos Koumanakos

Research Collaborator

TM

Tomas Martins

Research Collaborator

LP

Louis Perrault

Research Collaborator

BZ

Branislav Zudel

Research Collaborator

Our Approach

A unified framework ensuring all elasticity estimates are directly comparable across countries

Administrative Data

Analysis based on tax return data from national revenue agencies, covering millions of firms across partner countries.

Bunching Estimator

Exploits bunching at zero taxable income kink using recent advances in bunching methodology for identification.

Unified Framework

Standardized estimation package ensures methodological consistency and direct cross-country comparability.

Download Code (.zip)
Tools: Stata
Manual Setup:
  • Download and unzip "stata_crosscountry.zip".
  • Run "0_simulateData.do" to generate sample data.
  • Use "1_fixedCost.do" for estimation.

Join the Research Network

Building the global corporate elasticity database is a collaborative effort. We encourage researchers and tax authorities to contribute their work and help expand our understanding of corporate tax responsiveness worldwide.

Get in touch: nathan.seegert@gmail.com
Access Data Access Code

Research

Explore our working paper and related research outputs.

The Elasticity of Taxable Income Across Countries
Global Tax Research Initiative
View Paper