Tax Treaties and High Growth Entrepreneurship: Firm-Level Evidence across Developing African Countries
This research sets out to answer two main research questions. They include:
- What is the impact of Ratified Tax Treaties on small business development in the African region?
- Are there heterogeneous differences in this impact when considering the treaty partner, the type of treaty, and the proportion of foreign ownership of small businesses in the host countries?
Answering these research questions are especially relevant in developing countries since small businesses are shown to be an important source of technological innovation, job creation, and overall industrial growth (Tetteh and Essegbey, 2014; Ayyagari, Juarros, Peria, and Singh, 2016), and they are the most affected by FDI inflow that could arise from tax treaties (Thompson and Zang, 2018). Further, understanding the differing impact in small business outcomes from the heterogeneity in tax treaties and the composition of the ownership of the enterprise in host countries is important for an accurate and comparable analysis across multiple conditions of tax treaties. More so, in order to avoid a ‘blanket’ conclusion on the effect of tax treaties in developing countries, there is a need to accurately and comparably understand how different dimensions of such treaties affect specific enterprise outcomes in host countries.