Implicit tax dynamics and corporate life cycle: A quantitative analysis of B3 listed companies
DOI:
https://doi.org/10.1590/1808-057x20252171.ptPalabras clave:
implicit taxes, rate of return, effective tax rate, corporate life cycleResumen
This study aims to analyze how implicit costs vary across the corporate life cycle stages (LCS) and determine whether companies retain the benefits of tax incentives despite the presence of implicit taxes. Previous research has primarily explored corporate taxation and life cycle theories separately, with limited focus on their interaction, especially in emerging economies like Brazil. This study addresses this gap by examining the interplay between implicit taxes and corporate LCS within a complex tax environment. In Brazil, tax incentives are crucial economic policy tools. Understanding their effectiveness in light of implicit taxes offers critical insights for investors, managers, and policymakers seeking to enhance fiscal outcomes and corporate strategies. As the first study to link implicit taxes and corporate life cycles in Brazil, it contributes valuable perspectives on the development of targeted tax policies. It also lays a foundation for future research on firm dynamics, taxation, and economic development. Using ordinary least squares (OLS) and quantile regression (QR), the study analyzed data from 2010 to 2022 for B3 S.A. – Brasil, Bolsa, Balcão (B3)-listed firms. Corporate LCS were categorized following Dickinson’s (2011) cash flow approach, with control variables such as size, leverage, and asset composition to ensure robust results. This study examines the relationship between implicit taxes and the corporate LCS of Brazilian companies listed on B3. The results indicate that firms in the introduction, growth, shakeout, and decline stages experience a lower implicit tax burden compared to those in the maturity stage. Additionally, these firms retain a greater share of tax benefits, suggesting that implicit taxes do not fully negate the advantages of tax incentives. By extending the analysis of implicit taxes to an emerging market like Brazil, the study integrates implicit tax theory with corporate life cycle theory. It provides insights for tax policy design, strategic tax planning, and investment decisions.
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