Hello all,

I am a new member and I appreciate all your help and comments.

I am interested in evaluating the effect of temporary tax cut policies on firm performance. Specifically, I have annual data at the firm-level in 2000-2017. The first intervention was a CIT cut in 2008 and 2009, some firms (TreatCIT) only need to pay 70% CIT in 2008 and 2009. The second one was the VAT cut in 2009, the tax rate reduces 50% in some goods and services. All the firms were affected by at least 1 intervention. Particularly, in 2009, the total number of firms was 3675, 1970 affected by CIT cut only, 175 affected by VAT cut only, and 1530 affected by both kinds of the tax cut (no firm is unaffected, so there is no normal control group).

I want to see the effect of each kind of tax cut, and the total effect of both. The specification is as follow:
yit = firmi + yeart + α*TreatCIT*posCIT + β*TreatVAT*posVAT + γTreatCIT*TreatVAT*posVAT + Xitδ + u

In which: TreatCIT is a dummy for firms received CIT cut
TreatVAT is a dummy for firms received VAT cut
posCIT is a year dummy for years from 2008-2017
posVAT is a year dummy for years from 2009-2017

My questions are:
1. Can I obtain the effect of each kind of tax cut and the total effect of both with the above regression?
2. If not, can I run 2 separate generalized DID regressions to evaluate each policy impact? How to obtain the total effect?

Thank you in advance.

Viet

p/s: I attached a graph for illustration.