Do high corporate income tax rates demotivate entrepreneurs? The case of Azerbaijan

Kód výsledku v IS VaVaI

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Výsledek na webu

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DOI - Digital Object Identifier

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Jazyk výsledku

angličtina

Název v původním jazyce

Do high corporate income tax rates demotivate entrepreneurs? The case of Azerbaijan

Popis výsledku v původním jazyce

There exists a large body of theoretical and empirical work on the effects of corporate income taxes on entrepreneurial activity, but the literature remains inconclusive for our topic. Therefore, the purpose of this paper is to investigate whether corporate income tax rates affect the motivation of entrepreneurs to begin an entrepreneurial activity or not. Because of that we examine how corporate income taxes affect entrepreneurs in Azerbaijan using data in the period between the first quarter of 2004 and the fourth quarter of 2013. The model by Ruud and Gaëtan (2007) theoretically motivates and guides our analysis for studying how high tax rates affect the entrepreneurship decision. The model specifies how corporate income taxation affects the entry decision, based on the observation that entrepreneurs can choose whether to expand their business or not. Here, simple correlation analysis, impulse-response function analysis, and Johansen cointegration test has been used for the long and short term relationship. The empirical results provide evidence that higher corporate income tax rates exert a slightly positive influence on entrepreneurs in the shortrun. However, in the long-run these results are insignificant. We find that the main factors behind this are the application of a simplified and standard tax system of the Tax Code of Azerbaijan Republic that the former increases the growth rate of entrepreneurs running under a 'small business' while the latter decreases the growth rate of entrepreneurs running under 'small entrepreneuship subject'. This paper sheds light on the relationship between corporate income tax rates and the number of entrepreneurs, and provides the place for future researches in Azerbaijan.

Název v anglickém jazyce

Do high corporate income tax rates demotivate entrepreneurs? The case of Azerbaijan

Popis výsledku anglicky

There exists a large body of theoretical and empirical work on the effects of corporate income taxes on entrepreneurial activity, but the literature remains inconclusive for our topic. Therefore, the purpose of this paper is to investigate whether corporate income tax rates affect the motivation of entrepreneurs to begin an entrepreneurial activity or not. Because of that we examine how corporate income taxes affect entrepreneurs in Azerbaijan using data in the period between the first quarter of 2004 and the fourth quarter of 2013. The model by Ruud and Gaëtan (2007) theoretically motivates and guides our analysis for studying how high tax rates affect the entrepreneurship decision. The model specifies how corporate income taxation affects the entry decision, based on the observation that entrepreneurs can choose whether to expand their business or not. Here, simple correlation analysis, impulse-response function analysis, and Johansen cointegration test has been used for the long and short term relationship. The empirical results provide evidence that higher corporate income tax rates exert a slightly positive influence on entrepreneurs in the shortrun. However, in the long-run these results are insignificant. We find that the main factors behind this are the application of a simplified and standard tax system of the Tax Code of Azerbaijan Republic that the former increases the growth rate of entrepreneurs running under a 'small business' while the latter decreases the growth rate of entrepreneurs running under 'small entrepreneuship subject'. This paper sheds light on the relationship between corporate income tax rates and the number of entrepreneurs, and provides the place for future researches in Azerbaijan.

Druh

D - Stať ve sborníku

CEP obor

AE - Řízení, správa a administrativa

OECD FORD obor

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Projekt

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Návaznosti

V - Vyzkumna aktivita podporovana z jinych verejnych zdroju

Rok uplatnění

2015

Kód důvěrnosti údajů

S - Úplné a pravdivé údaje o projektu nepodléhají ochraně podle zvláštních právních předpisů

Název statě ve sborníku

Conference Proceedings of MEKON 2015 Selected Papers

ISBN

978-80-248-3840-3

ISSN

1805-9945

e-ISSN

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Počet stran výsledku

13

Strana od-do

107-119

Název nakladatele

VŠB-TU Ostrava

Místo vydání

Ostrava

Místo konání akce

Ostrava

Datum konání akce

4. 2. 2015

Typ akce podle státní příslušnosti

EUR - Evropská akce

Kód UT WoS článku

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