Many countries provide tax preferences to small and medium enterprises (SMEs) including no or a less tax rate and an extension of tax payment. While such tax preferences may alleviate the financial constraints that SMEs face, they may provide a disincentive for SMEs to grow to be large firms and lead to the misallocation of resources. Thus this study conducts theoretical and analytical analyses of the effects of tax preferences provided to SMEs on firm dynamics in terms of scale, productivity, profitability, financing, entry, and exit, and on the macroeconomy through the misallocation of resources. 

• November 9th, 2023

Hosono, K., M. Hotei, and D. Miyakawa, "The Interaction of a Size-Dependent Tax Policy and Financial Frictions: Evidence from a Tax Reform in Japan" was accepted for publication in Small Business Economics.

• November 6th, 2022.

Hosono, K., M. Hotei, and D. Miyakawa, "Causal Effects of a Tax Incentive on SME Capital Investment" was accepted for publication in Small Business Economics.

• September 20th, 2021.

We put up a website to publicize the progress in our study on size-dependent tax policy, firm growth, and macroeconomy.