Journal of Applied Finance & Banking

Fiscal Policies and Performance: Evidence from Dominican Republic firms

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  • Abstract

     

    This paper investigated the impact of fiscal incentives on firm performance in the Dominican Republic. Although the literature on tax incentives is large, the impact of tax incentives on companies has been less studied and is the subject of intense debate. The analysis, carried out on the period from 2006 to 2015, uses panel data models with fixed and random effects to evaluate the relationship between corporate tax incentives and firm-level performance indicators opportunely selected. The empirical finding highlights that corporate income tax exemptions positively impact the performance of individual firms in the Dominican Republic, nonetheless uneven tax treatment across firms affects competition in the industrial sector, with negative impact on overall economic productivity.

     

    Keywords: Corporate Income Tax, Performance, Dominican Republic.