TAILIEUCHUNG - The effect of taxation and corruption on firm growth: An empirical investigation for Vietnam

The effect of taxation and corruption on firm growth: An empirical investigation for Vietnam. The aim of this study is to analyze empirically the impact of taxation and corruption on the growth of manufacturing firms in Vietnam. The study employed pooled OLS estimation and then instrument variables with fixed effect for the panel data of 1377 firms in Vietnam from 2005 to 2011. | Journal of Economics and Development, , , December 2016, pp. 5-29 ISSN 1859 0020 The Effect of Taxation and Corruption on Firm Growth: An Empirical Investigation for Vietnam Le Thi Ngoc Bich Post and Telecommunication Institute of Technology, Vietnam Email: bichltn@ Abstract The aim of this study is to analyze empirically the impact of taxation and corruption on the growth of manufacturing firms in Vietnam. The study employed pooled OLS estimation and then instrument variables with fixed effect for the panel data of 1377 firms in Vietnam from 2005 to 2011. These data were obtained from the survey of the Central Institute for Economic Management and the Danish International Development Agency. The results show that both taxation and corruption are negatively associated with firm growth measured by firm sales adjusted according to the GDP deflator. A one-percentage point increase in the bribery rate is linked with a reduction of 16,883 percentage points in firm revenue, over four and a half times bigger than the effect of a one-percentage point increase in the tax rate. From the findings of this research, the author recommends the Vietnam government to lessen taxation on firms and that there should be an urgent revolution in anti-corruption policies as well as bureaucratic improvement in Vietnam. Keywords: Bribery rate; corruption; instrument variable; fixed–effect method; panel data; small and medium enterprises; taxation; Vietnamese firms. Journal of Economics and Development 5 Vol. 18, , December 2016 1. Introduction in turn, will create growth and employment. Moreover, Vietnam has had to face fierce global competition after joining the World Trade Organization (WTO) in 2007, so this change in taxation can promote competitiveness and exports of Vietnamese firms by lessening their financial burden. Especially, this financial relief is necessary for small and medium enterprises (SMEs) that account for over 90% of the number of .

• Quản trị kinh doanh
• The effect of taxation
• Corruption on firm growth
• An empirical investigation
• Investigation for Vietnam
• The impact of taxation
• An Overview
• Investment Agreements
• Investment Protection
• Bilateral Investment
• Investment Treaties
• Grand Bargain
• Government Partisanship
• the Effects
• MatureWelfare
• Regressive Taxation
• United Kingdom
• Ambiguous Impact
• State Backlash
• taxation system
• Tax benefits
• Types of entities
• Importance of treaties
• Investment through
• equity investments
• the Impact
• Household Saving
• Corrective Taxes
• Deposit Insurance
• Seigniorage
• Reserve Requirements