Tax Structure and Economic Growth: A Panel Cointegrated VAR Analysis

Sanzo, Silvestro Di; Bella, Mariano; Graziano, Giovanni

doi:10.1007/s40797-017-0056-0

Cited by 14 publications

(9 citation statements)

References 40 publications

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“…The income tax variable has a negative significant effect on Indonesian economic growth. These research results are in accordance to research findings of Sanzo et al (2017), Mndanat et al (2018), McNaab (2018. If a government want to increase revenue by increasing income tax, it will have an impact on people's purchasing power.…”

Section: Table 2 Normality Test Resultssupporting

confidence: 92%

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Does The Tax Structure Play A Role In Economic Growth? Emperical Evidenve from Indonesia

Nasir

2022

MIMBAR, Jurnal Sosial dan Pembangunan

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Economic growth is an important indicator of development. One of the incentives to increase economic growth comes from taxes. Taxes are the easiest thing to get and do by the government. This study aims to examine the effect of the tax structure on economic growth in Indonesia. The tax structure variables are income tax, goods and services tax, and customs tax. This study uses a multiple linear regression from 1994 to 2018. The results of the study found that income tax and customs tax had a significant negative effect on economic growth. Meanwhile, the goods and services tax has a significant positive effect on economic growth. The suggestion of this research is that the government should consider not increasing income taxes and customs taxes because they have an impact on public consumption and cost domestic production.

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Section: Table 2 Normality Test Resultssupporting

confidence: 92%

“…This means that taxes do not always contribute to increasing economic growth. As the study conducted McNabb (2018), Sanzo et al (2017), the imposition of income tax causes people to become sluggish and has an impact on purchasing power. The next effect is that economic growth becomes weak.…”

Section: Introductionmentioning

confidence: 99%

Does The Tax Structure Play A Role In Economic Growth? Emperical Evidenve from Indonesia

Nasir

2022

MIMBAR, Jurnal Sosial dan Pembangunan

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“…The theoretical model developed by Jaimovich and Rebelo (2016) predicted the existence of non-linearity. A recent study by Sanzo et al (2017) proved the fact for OECD countries where they explore the presence of threshold cointegration amongst the variables. However, on a contrary result, Nantob (2014) find an absence of non-linearity in the tax–growth relationship for the case of West African economic and monetary union countries.…”

Section: Introductionmentioning

confidence: 94%

Tax structure and economic growth in India: insights from ARDL model

Neog

Gaur

2020

IGDR

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Purpose In the academic debate, the tax–growth relationship is always a controversial one. This paper aims to investigate the relationship between tax structure and economic growth in India for the period 1980-2016. After controlling for total tax revenue share to GDP in the estimation model, the authors examine the long-run and short-run relationship between tax structure and growth in India. Design/methodology/approach Auto-regressive distributed lag (ARDL) model has been used in this study. This bound cointegration model has certain advantages to the traditional cointegration model. This study also applies the threshold cointegration test of Hansen and Seo (2002) for examining non-linearity in tax–growth nexus. Findings The analysis shows that income tax share, corporation tax share and excise tax share are harmful to growth in the long-run. While the custom share is enlarging the growth performance. Corporation tax share is also reducing growth in the short-run. Following the Pesaran et al. (2001) approach of ARDL bound testing, the authors find the existence of a long-run relationship between studied variables. However, this study does not find any existence of threshold effect in the tax–growth relationship for India. Practical implications Based on the empirical findings, the author suggests that the prime tax change, which has the potential to impact both long-run growth and short-run economic recovery is the reduction of corporate tax rate with sustainable revenue generation. It will definitely enlarge the foreign direct investment, saving and investment in India. Originality/value This study will be a contribution to the empirical literature by investigating “tax–growth” relationship in the Indian case. To the knowledge, this will be the first study to examine this relationship for India with a recent data set.

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“…As well as the Government spending, Debt, tax revenues have been used by these authors, and it is found different D, tax revenues, have been used by these authors and found different responses of macroeconomic activities to fiscal policy. As stated by Di Sanzo et al [15] examined the Tax Structure and Economic Growth they used annual data from 1970 to 2012 for a panel of twenty Organisation for Economic Co-operation and Development countries, and re-evaluates the results of previous research relying on linear and non-linear panel cointegrated vector autoregressive (VAR) models. The asymmetric impact of tax changes on growth is estimated adapting the threshold cointegration methodology proposed by Hansen [16] to the panel framework.…”

Section: Review Of Empirical Literaturementioning

confidence: 99%

The Nexus Between Fiscal Policy and Economic Growth for Jordan: Fresh Insights From Maki Cointegration

AL-KASASBEH¹

2022

Innovare J Bus Mgmt

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The current study was carried out to empirically investigate the relationships between government expenditure, taxes, and debt in Jordan, using the annual time series data over the period 1980-2020. Despite the increased awareness of the importance of fiscal policy, Jordan is still seeing a drastic decrease in the volume of growth. Thus, this study was carried out to determine how government expenditure, taxes, and debt affect economic growth. For the empirical analysis, the study adopted Augmented Dicky Fuller, Phillips-Perron unit root tests, Zivot and Andrews and Lumsdaine and Papell unit root tests with structural breaks. It employs recently developed econometric techniques such as Maki cointegration tests allowing for an unknown number of breaks. The results of the cointegration test showed the presence of a cointegration relationship with structural breaks. It was found that the Jordanian crisis that occurred in 1989 harmed economic growth. However, the structural break in 2008 had an affirmative effect on economic growth. According to the study, tax revenues, public deficits, and debt can all be reduced and the economy can thrive if policymakers implement smart fiscal policies that boost gross fixed capital formation.

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Tax Structure and Economic Growth: A Panel Cointegrated VAR Analysis

Cited by 14 publications

References 40 publications

Does The Tax Structure Play A Role In Economic Growth? Emperical Evidenve from Indonesia

Does The Tax Structure Play A Role In Economic Growth? Emperical Evidenve from Indonesia

Tax structure and economic growth in India: insights from ARDL model

The Nexus Between Fiscal Policy and Economic Growth for Jordan: Fresh Insights From Maki Cointegration

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