Is the corporation tax a barrier to productivity growth?

  • Desiderio Romero-JordánEmail author
  • Ismael Sanz-Labrador
  • José Félix Sanz-Sanz


Evidence shows that size matters in terms of productivity. Within this literature, this paper analyses whether corporation tax penalises the productivity growth of smaller enterprises (SEs) (< 20 workers). For this purpose, we use a sample of Spanish manufacturing companies for the period 1996 to 2009. Results show that corporation tax has a negative effect upon productivity growth in companies with the greatest profitability, whether large or small. However, in relative terms, this barrier is greater for SEs. The results therefore show that corporation tax prevents the SMEs in Spain from improving their low productivity.


SME policy Corporation tax Productivity growth Small firms 

JEL codes

L53 H25 L25 L26 L6 



We are grateful to the Editor and two anonymous referees for their comments and suggestions.


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Authors and Affiliations

  1. 1.Universidad Rey Juan CarlosMadridSpain
  2. 2.Universidad Complutense de MadridMadridSpain

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