Response of fiscal efforts to oil price dynamics

Abubakar, Attahir Babaji; Muhammad, Mansur; Mensah, Samuel

doi:10.1016/j.resourpol.2023.103353

Cited by 4 publications

(1 citation statement)

References 27 publications

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“…To date, most of the literature has focused on increases in resource tax revenues and has typically found a negative relationship between resource tax revenues and non-resource ones, ignoring the possibility of asymmetric relationships (Bornhorst et al, 2009;Crivelli and Gupta, 2014;Ossowski and Gonzales, 2012;Thomas and Treviño, 2013). Additionally, recent research has suggested that macroeconomic variables exhibit nonlinear and asymmetric relationships, and the findings indicate that ignoring such asymmetry can produce misleading outcomes (Abubakar et al, 2023). Therefore, the conventional wisdom that increases (decreases) in resource tax revenues weaken (improve) nonresource ones can be challenged.…”

Section: Introductionmentioning

confidence: 99%

The Impact of Resource Revenue on Non-Resource Tax Revenue in Oil-Exporting Countries: Evidence from Nonlinear Analysis

Slimane

2024

IJEEP

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The main objective of this study was to examine the asymmetric effect of resource tax revenues on non-resource ones in oil-rich countries, as most previous research on the subject has assumed a symmetric resource-non-resource tax revenue nexus. We employed linear ARDL model to analyze the short- and long-term effects and found a negative relationship between resource and non-resource tax revenues. Based on nonlinear ARDL model estimates, empirical results provide strong evidence for the asymmetric effect of resource tax revenues. In the long-run, positive shocks have negative impacts on non-resource tax revenues. Conversely, negative shocks were found to not lead to increased non-resource tax revenues. In addition, findings show that the short-term effects are stronger when resource tax revenues increase.

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