scholarly journals The impact of taxation on economic growth in India : A disaggregated approach using the ARDL bounds test to co-integration

2017 ◽  
Vol 5 (1) ◽  
pp. 19
Author(s):  
Subramanya Venkataraman ◽  
Arabi Urmi
Keyword(s):  
Economic Growth ◽  
Economic Development ◽  
Income Tax ◽  
Series Data ◽  
Ardl Bounds Test ◽  
Long Run ◽  
Indirect Taxes ◽  
Bounds Test ◽  
The Impact

Most Governments in the world are striving to attain long term growth and economic development with taxation as one of the major tools. However, it is necessary to know which components of tax are to be targeted in order to attain economic growth. This study therefore disaggregated the various components of direct and indirect taxes and investigated their effects on Economic Growth in India using time series data from 1977-2015 and the ARDL Bounds test approach to co-integration. The study found that in the long run, among the components of direct taxes, personal income tax had no impact on economic growth whiles corporate income tax had a positive statistically significant impact on economic growth. Further on the indirect taxes, the study found that in the long run, whiles excise duty had no statistically significant impact on economic growth, customs duty had a positive statistically significant impact. The study therefore concluded that policy makers must be circumspect in targeting which tax components to be used as tools in influencing long term economic growth and economic development.

Does Public Debt Service Expenditure Crowd-Out Economic Growth? Empirical Evidence from an African Developing Country

2019 ◽  
Vol 64 (3) ◽  
pp. 23-38
Author(s):  
Talknice Saungweme ◽  
Nicholas M. Odhiambo
Keyword(s):  
Economic Growth ◽  
Public Debt ◽  
Time Series Data ◽  
Policy Formulation ◽  
Debt Service ◽  
Series Data ◽  
Long Run ◽  
Short Run ◽  
The Impact

Abstract This paper contributes to the ongoing debate on the impact of public debt service on economic growth; and it provides an evidence-based approach to public policy formulation in Zimbabwe. The empirical analysis was performed by applying the autoregressive distributed lag (ARDL) technique to annual time-series data from 1970 to 2017. The study findings reveal that the impact of public debt service on economic growth in Zimbabwe is negative in the short run but positive in the long run. The results are suggestive of the existence of a crowding-out effect of public debt service in Zimbabwe in the short run and a crowding-in effect in the long run. In view of these findings, the government should consider fiscal and financial policies that promote a constant supply of long-term finance, long-term fixed investments, and extension of a government securities maturity structure so as to ensure sustainable short- and long-term public debt service expenditures. The study further recommends the strengthening of non-distortionary revenue mobilisation reforms to reduce market distortions and boost domestic investment.

scholarly journals BANKING SECTOR LIBERALIZATION AND ECONOMIC GROWTH: CASE STUDY OF PAKISTAN

2016 ◽  
Vol 17 (1) ◽  
pp. 125-139 ◽  
Author(s):  
Najia SAQIB
Keyword(s):  
Economic Growth ◽  
Banking Sector ◽  
Time Series Data ◽  
Series Data ◽  
Omitted Variables ◽  
Financial Systems ◽  
Long Run ◽  
Banking Sector Development ◽  
The Impact

Economic theory suggests that sound and efficient financial systems channel capitals to its most productive uses are beneficial for economic growth. Sound and efficient financial systems are especially important for sustaining growth in developing countries. This paper examines the impact of banking sector liberalization on long-term economic growth in Pakistan by using a time series data for the period 1971–2011. The results show that there exist a significant positive long run relationship between banking sector development and economic growth in the country. The sensitivity analysis also shows that the relationship remain positive and significant no matter what combination of the omitted variables are used in the basic model. Thus, our findings support the core idea that banking sector development stimulates long term economic growth in a country.

scholarly journals Impact of Women Education on Economic Growth: An Evidence from Pakistan

2021 ◽  
Vol 3 (2) ◽  
pp. 113-120
Author(s):  
Kiran Zahra ◽  
Mudassar Yasin ◽  
Baserat Sultana ◽  
Zulqarnain Haider ◽  
Raheela Khatoon
Keyword(s):  
Higher Education ◽  
Economic Growth ◽  
Economic Development ◽  
Time Series Data ◽  
Essential Element ◽  
Series Data ◽  
Education Expenditure ◽  
Long Run ◽  
The Government ◽  
The Impact

Education is the most fundamental right in the current situation, and it is an essential element of economic growth. No country can achieve economic development and goals without investing in education. Pakistan’s economic development is possible when education is equal for both men and women, but the government did not give importance to the sector as it deserved. This study investigated the determinants of female higher education in Pakistan and the impact of women's education on the economic growth of Pakistan. This study utilized time-series data from 1991 to 2019. The autoregressive distribution lag (ARDL) model is applied to estimate the impact. The result shows that in Pakistan, education expenditure has no positive effect on female education. In contrast, a positive relationship between female higher education and GDP growth exists, but this relation is not strong in the short run and long run.

Does corruption matter for economic development? Long run evidence from Bangladesh

2017 ◽  
Vol 44 (3) ◽  
pp. 350-361 ◽  
Author(s):  
Mohammad Habibullah Pulok ◽  
Moin Uddin Ahmed
Keyword(s):  
Time Series ◽  
Economic Development ◽  
Negative Impact ◽  
Public Awareness ◽  
Test Method ◽  
Series Data ◽  
Content Type ◽  
Ardl Bounds Test ◽  
Long Run ◽  
Bounds Test

Purpose Despite remarkable economic growth in the last two decades, corruption is a “way of life” in Bangladesh. The purpose of this paper is to investigate the long run relationship between economic development and corruption in Bangladesh over 1984-2013. Design/methodology/approach This study employs autoregressive distributed lag (ARDL) bounds test method to examine the long run relationship or cointegration between corruption and per capita real GDP in Bangladesh using annual time series data. International Country Risk Guide’s (ICRG) corruption index is used as the proxy to measure the degree of corruption. Findings The results of ARDL bounds test confirm that there exists a long run association between corruption and economic development in Bangladesh. Findings from the long run estimation provide evidence of negative impact of corruption on economic development. The negative value of the error correction term in the short model reinforces the existence of long run relationship. Originality/value Using multivariate time series approach, this paper contributes to corruption literature by investigating the long run relation between corruption and economic development in Bangladesh. Bangladesh would be able to accelerate its economic development further by reducing the level of corruption through institutional reforms and raising public awareness. Most importantly, government should focus on identifying and abolishing laws and programmes promoting corruption.

Does corruption adversely affect economic growth in Tunisia? ARDL approach

2020 ◽  
Vol 23 (1) ◽  
pp. 38-54
Author(s):  
Anas Al Qudah ◽  
Azzouz Zouaoui ◽  
Mostafa E. Aboelsoud
Keyword(s):  
Economic Growth ◽  
Economic Development ◽  
Government Expenditure ◽  
Physical Capital ◽  
Content Type ◽  
Distributed Lag ◽  
Long Run ◽  
Per Capita ◽  
The Impact

Purpose This study aims to better understand the phenomenon of corruption in Tunisia in relation to its impact on economic development. The period of study is 1995 to 2014. The auto-regressive distributed lag (ARDL) model is adopted to examine the existence of a long-term relationship between the above-mentioned variables and also the direct and indirect consequences of corruption on economic development in Tunisia. Design/methodology/approach The study uses a modern econometric technique to estimating the long-term relationship (e.g. the co-integration) between corruption and economic development; using this technique also allows us to investigate the impact of corruption on economic growth. Findings The empirical results show that corruption has a negative effect on per capita gross domestic product (GDP) in Tunisia for the period under review. This effect is described as a direct effect of corruption in the long term; specifically, declines are observed in per capita GDP, over the long run, by almost 1 per cent, following a 1 per cent increase in the level of corruption. The results also show that corruption has indirect effects via transmission channels, such as investment in physical capital, which is positively significant in the presence of corruption. The same observation is made at the level of government expenditure during the previous year, while for those of the current year, the coefficient becomes negative but not significant. With respect to human capital, the impact of corruption on education expenditures is insignificant. Originality/value The paper begins with an overview of previous literature in this area. Given the nature of corruption and the differences in the meanings attributed to it, from one country to another and from one culture to another, the paper moves on to study the impact of corruption in Tunisia as a case study for one country with one socio-cultural environment. The authors then propose several methods and possible solutions, which could be implemented to deal with this problem.

scholarly journals Government Expenditure and Economic Growth in Nigeria, 1970-2010: ARDL Bounds Test Approach

2015 ◽  
Vol 1 (1) ◽  
pp. 4
Author(s):  
Abdulrazak Umar Muazu ◽  
Lawali Mohammad
Keyword(s):  
Economic Growth ◽  
Public Expenditure ◽  
Time Series Data ◽  
Positive Impact ◽  
Series Data ◽  
Bounds Testing ◽  
Long Run ◽  
Bounds Test ◽  
The Impact ◽  
Equilibrium Correction

This paper analyses the impact of public expenditure on economic growth in Nigeria during the period 1970 to 2010 making use of annual time series data. The study employs the bounds testing (ARDL) approach toexamine the long run and short run relationships between public expenditure and economic growth in Nigeria. The bounds test suggested that the variables of interest put in the framework are bound together in the long-run. The associated equilibrium correction was also significant confirming the existence of long-run relationships. Our findings indicate the impact of total public spending on growth to be negative which is consistent with other past studies. Recurrent expenditure however was found to have little significant positive impact on growth. Therefore, government should increase its spending on infrastructure, social and economic activities.

scholarly journals Political Stability and its Impact on Economic Growth of Pakistan (1988-2018): A Time Series Analysis

2020 ◽  
Vol 6 (1) ◽  
pp. 273-282
Author(s):  
Majid Hussain Phul ◽  
Muhammad Saleem Rahpoto ◽  
Ghulam Muhammad Mangnejo
Keyword(s):  
Economic Growth ◽  
Time Series ◽  
Time Series Data ◽  
Political Stability ◽  
Series Data ◽  
Explanatory Variables ◽  
Long Run ◽  
Short Run ◽  
The Impact ◽  
Positive Effect

This research paper empirically investigates the outcome of Political stability on economic growth (EG) of Pakistan for the period of 1988 to 2018. Political stability (PS), gross fixed capital formation (GFCF), total labor force (TLF) and Inflation (INF) are important explanatory variables. Whereas for model selection GDPr is used as the dependent variable. To check the stationary of time series data Augmented Dickey Fuller (ADF) unit root (UR) test has been used,  and whereas to find out the long run relationship among variables, OLS method has been used. The analysis the impact of PS on EG (EG) in the short run, VAR model has been used. The outcomes show that all the variables (PS, GFCF, TLF and INF) have a significantly positive effect on the EG of Pakistan in the long run period. But the effect of PS on GDP is smaller. Further, in this research we are trying to see the short run relationship between GDP and other explanatory variables. The outcomes show that PS does not have such effect on GDP in the short run analysis. While GFCF, TLF and INF have significantly positive effect on GDP of Pakistan in the short run period.

scholarly journals Are some taxes better for growth in Pakistan? A time series analysis

2018 ◽  
Vol 45 (10) ◽  
pp. 1439-1452 ◽  
Author(s):  
Kashif Munir ◽  
Maryam Sultan
Keyword(s):  
Economic Growth ◽  
Time Series ◽  
International Trade ◽  
Sales Tax ◽  
Tax Base ◽  
Content Type ◽  
Long Run ◽  
Indirect Taxes ◽  
Short Run ◽  
The Impact

Purpose The purpose of this paper is to analyze the impact of taxes on economic growth in the long run as well as in the short run. Design/methodology/approach The study uses simple time series model, where real GDP is dependent variable and different forms of taxes are explanatory variables under ARDL framework from 1976 to 2014 at annual frequency for Pakistan. Findings Direct taxes have positive relation with economic growth in the long run. Sales tax, tax on international trade (tariffs) and other indirect taxes have positive impact on economic growth of Pakistan in the long run as well as in the short run. However, sales tax and other indirect taxes impact negatively on economic growth in the short run after one year because people realize decline in their real income. Practical implications Government should increase direct taxes by increasing tax base. Indirect taxes usually indicate negative impact after one and two years; therefore, government should decrease its reliance on indirect taxes. Government should promote tax awareness among the people which increase the tax morale of people and increase the tax base. Originality/value Taxes are disaggregated into direct and indirect taxes, while indirect taxes have been further disaggregated into excise duty, sales tax, surcharges, tax on international trade and other indirect taxes. This study provides useful insight for policy makers in designing taxes and their effect on growth.

The impact of financial development, economic growth and energy consumption on environmental degradation

2015 ◽  
Vol 26 (5) ◽  
pp. 666-682 ◽  
Author(s):  
Madhu Sehrawat ◽  
A K Giri ◽  
Geetilaxmi Mohapatra
Keyword(s):  
Economic Growth ◽  
Energy Consumption ◽  
Financial Development ◽  
Environmental Degradation ◽  
Series Data ◽  
Development Economic ◽  
Content Type ◽  
Indian Economy ◽  
Long Run ◽  
The Impact

Purpose – The purpose of this paper is to investigate the impact of financial development, economic growth and energy consumption on environment degradation for Indian economy by using the time series data for the period 1971-2011. Design/methodology/approach – The stationary properties of the variables are checked by ADF, DF-GLS, PP and Ng-Perron unit root tests. The long-run relationship is examined by implementing the Autoregressive Distributed Lag bounds testing approach to co-integration and error correction method (ECM) is applied to examine the short-run dynamics. The direction of the causality is checked by VECM framework and variance decomposition is used to predict exogenous shocks of the variables. Findings – The empirical evidence confirms the existence of long-run relationship among the variables. Financial development appears to increase environmental degradation in India. The main contributors to environmental degradation are: economic growth, energy consumption financial development and urbanization. The results also lend support to the existence of environmental Kuznets curves for Indian economy. Research limitations/implications – The present study suggests that environmental degradation can be reduced at the cost of economic growth or energy efficient technologies should be encouraged to enhance the domestic product with the help of financial sector by improving environmental friendly technologies from advanced economies. Originality/value – This paper proposes to make a contribution to the existing literature through examining the relationship between financial development and environmental degradation in Indian economy during 1971-2011 by employing modern econometric techniques.

The colonial exports pattern, institutions and current economic performance

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Tania El Kallab ◽  
Cristina Terra
Keyword(s):  
Human Capital ◽  
Economic Development ◽  
Resource Curse ◽  
Data Set ◽  
Content Type ◽  
Long Run ◽  
French Colonies ◽  
Colonial Institutions ◽  
The Impact

PurposeThis paper explores the role of colonial heritage on long-term economic development from a resource-curse perspective. The authors investigate the impact of colonial exports on long-term economic development through two channels: (1) a direct impact of the economic dependency on natural resources and (2) an indirect impact via its effect on colonial institutions, which persisted over time and influenced current economic development.Design/methodology/approachTo address this issue, the authors use an original data set on French bilateral trade from 1880 to 1912. The authors use partial least square structural equation modeling (PLS-SEM) in the empirical analysis, so that the authors are able to construct latent variables (LVs) for variables that are not directly observable, such as the quality of institutions.FindingsThe authors find that exports of primary goods to France had a negative impact on colonial institutions and that for French colonies, this impact was driven by minerals exports. Despite its impact on colonial institutions, exports of French colonies had no significant indirect impact on their current institutions. The authors find no significant direct impact of colonial trade on current development for French colonies. Finally, colonial exports of manufactured products had no significant impact on colonial institutions among French colonies and a positive impact among non-French ones.Research limitations/implicationsResearch implications regarding the findings of this paper are, namely, that the relative poor performance within French colonies today cannot be attributed to the extraction of raw materials a century ago. However, human capital and institutional development, instead of exports, are more relatively important for long-term growth. Some limitations in trying to determine the simultaneous relationship among colonial trade, institutions and economic performance are the relation between colonial trade and the extent of extraction from the colonizer, which is hard to quantify, as well as its precise mechanism.Practical implicationsSince the initial institutions set in those former colonies presented a strong persistence in the long run, their governments should focus now on building sound and inclusive political and economic institutions, as well as on investing in human capital in order to foster long-term growth. Once a comprehensive set of institutional and human resources are put in place, the quality and quantity of exports might create a positive spillover on the short-run growth.Social implicationsOne social implication that can be retrieved from this study is the ever-lasting effect of both human capital investment and introduction of inclusive political and economic institutions on the long-run impact of growth.Originality/valueThe paper uses an original primary data set from archival sources to explore the role of colonial heritage on long-term economic development from a resource-curse perspective. It applies a relatively new model partial least squares path modeling (PLS-PM) that allows the construction of LVs for variables that are not directly observable, as well as channeling the impact on growth through both direct and indirect channels. Finally, it allows for the simultaneous multigroup analysis across different colonial groups.

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