scholarly journals Determinants of Tax Revenue in Sierra Leone: Application of the ARDL Framework

2021 ◽  
Vol 4 (4) ◽  
pp. p25
Author(s):  
Abu Bakarr TARAWALIE ◽  
Sia HEMORE
Keyword(s):  
Sierra Leone ◽  
Negative Impact ◽  
Estimation Procedure ◽  
Tax Revenue ◽  
Infrastructure Development ◽  
Speed Of Adjustment ◽  
Real Gdp ◽  
Long Run ◽  
Short Run ◽  
Bound Test

The aim of this paper is to investigate the determinants of tax revenue in Sierra Leone, over the period 1990Q1 to 2020Q1, within the context of the ARDL estimation procedure. The result from the ARDL Bound test for cointegration suggests that a long-run relationship exists among the variables. The long run analysis indicates that real GDP (Y), openness (Op) and official development assistance (ODA) are the main determinants of tax revenue (TR) in Sierra Leone, with positive coefficients. This result is in tandem with the short run findings, which establishes a positive relationship between tax revenue and its regressors- real GDP and openness. However, the short run result also suggests that inflation has a negative impact on tax revenue. The findings confirm that any short-run disequilibrium to the long-run can be corrected at the 11 percent speed of adjustment quarterly, albeit at a low speed of adjustment. The diagnostic result shows that approximately 75 percent of the variation in the dependent variable is explained by the regressors based on the value of the R-squared. It also confirms that the model is free of serial correlation and heteroscedasticity, whilst the CUSUM test indicates stability of the model coefficients. The policy implication is for government to pursue policies that will enhance economic growth, through investment in growth enhancing sectors including agriculture, health, education, energy and infrastructure development; and ensure a politically stable environment as a recipe for private sector investment.

scholarly journals Taxation, government spending and economic growth: The case of Bulgaria

2021 ◽  
Vol 7 (3) ◽  
pp. 255-266
Author(s):  
G. Ganchev ◽  
◽  
I. Todorov ◽  
Keyword(s):  
Economic Growth ◽  
Growth Rate ◽  
Tax Revenue ◽  
Gdp Growth ◽  
Real Gdp ◽  
Long Run ◽  
Gdp Growth Rate ◽  
Short Run ◽  
The Impact

The objective of this article is to estimate the impact of three fiscal instruments (direct taxes, indirect taxes, and government expenditure) on Bulgaria’s economic growth. The study employs an autoregressive distributed lag model (ARDL) and Eurostat quarterly seasonally adjusted data for the period 1999–2020. Four control variables (the shares of gross capital formation, household consumption, and exports in GDP as well as the economic growth in the euro area) are included in the model to account for the influence of non-fiscal factors on Bulgaria’s real GDP growth rate. The empirical results indicate a long-run equilibrium relationship between Bulgaria’s economic growth and the independent variables in the ARDL. In the short term, Bulgaria’s real GDP growth rate is affected by its own past values and the previous values of the shares of direct tax revenue, exports, government consumption, and indirect tax revenue in GDP. In the long term, Bulgaria’s economic growth is influenced by its own previous values and the past values of the share of household consumption in GDP and the euro area’s real GDP growth rate. Fiscal instruments can be used to stabilize Bulgaria’s growth in the short run but they are neutral in the long run. The direct tax revenue, government consumption, and indirect tax revenue are highly effective and can be used as tools for invigorating and stabilizing Bulgaria’s economic growth in the short run. However, in the long term, the real GDP growth rate can be hastened only by encouraging domestic demand (final consumption expenditure of households) and promoting exports. This research cannot answer the question of whether flat income taxation stabilizes the economy or not, since it does not separate the impact of tax rate changes from the influence of tax base modifications.

Electricity consumption and GDP nexus in Bangladesh: a time series investigation

2019 ◽  
Vol 27 (1) ◽  
pp. 35-48 ◽  
Author(s):  
Sima Rani Dey ◽  
Mohammed Tareque
Keyword(s):  
Causal Relationship ◽  
Strong Evidence ◽  
Electricity Consumption ◽  
Omitted Variables ◽  
Content Type ◽  
Real Gdp ◽  
Long Run ◽  
Short Run ◽  
Per Capita ◽  
Bound Test

Purpose The purpose of this paper is to assess the empirical cointegration, long-run and short-run dynamics as well as causal relationship between electricity consumption and real GDP in Bangladesh for the period of 1971‒2014. Design/methodology/approach Autoregressive Distributed lag (ARDL) “Bound Test” approach is employed for the investigation in this study. Findings Both short-run and long-run coefficients are providing strong evidence of having positive significant association between electricity consumption and GDP. Our long-run results remain robust to different measurements and estimators as well. The study reveals the unidirectional causal flow running from per capita electricity consumption to per capita real GDP in the short run. The study result also yields strong evidence of bidirectional causal relationship between per capita electricity consumption and per capita real GDP in the long run with feedback. It is suggested that both electricity generation and conservation policy will be effective for Bangladesh economy. Originality/value In prior studies, lack of causality between electricity consumption and GDP is due to the omitted variables. Combined effects of public spending and trade openness on GDP and electricity consumption are also considerable.

scholarly journals Determinants of Trade Deficit in Nepal: An Econometric Investigation

2020 ◽  
Vol 4 ◽  
pp. 73-86
Author(s):  
Surendra Raj Nepal
Keyword(s):  
Exchange Rate ◽  
Error Correction ◽  
Causal Relationship ◽  
Trade Deficit ◽  
Goods And Services ◽  
Real Gdp ◽  
Long Run ◽  
Short Run ◽  
Bound Test ◽  
Ardl Bound Test

Background: Nepal has been importing some of goods and services from other countries and is also capable of exporting some other goods and services to foreign countries. Because of over dependency on foreign goods, Nepal has been suffering from trade deficit for more than 45 years. Objective: This study aims to investigate the relationship of trade deficit in Nepal with its determinants by using econometric analysis where exchange rate, real gross domestic product and foreign direct investment are taken as determinants of trade deficit. Its main objective is to examine the long-run, short-run and causal relationship among the variables. Materials and Methods: Annual time series data from 1974/75 (from 1988/89 in case of FDI) to 2018/2019 obtained from different sources: Nepal Rastra Bank, Economic Survey of Nepal, The World Bank and Department of Industry, Nepal Government were used in this study. Unit root test was used to check stationary. Autoregressive Distributed Lag (ARDL), ARDL bound test and Error Correction Model (ECM) were applied to find short-run as well as long-run relationship. Finally, pair-wise causal relationship was tested by using Granger causality. Results: All variables were found to be stationary at first difference. The test statistic of ARDL bound test was 8.17 and was greater than upper bound of 6.36 at 1% significance level. Error correction term’s p-value was 0.0052 and the corresponding values for pair-wise Granger causality from trade deficit to FDI and FDI to trade deficit were 0.00009 and 0.00005, respectively. Conclusion: There was positive and significant long-run relationship between exchange rate and trade deficit whereas there was negative and significant long-run relationship between real GDP and trade deficit. Moreover, real GDP positively affected trade deficit in short-run. Furthermore, bidirectional causal relationship has been observed between FDI and trade deficit.

scholarly journals What Determines Balance of Payments: A Case of Pakistan

2018 ◽  
Vol 2 (1) ◽  
pp. 47
Author(s):  
Syeda Azra Batool ◽  
Tahir Memood ◽  
Atif Khan Jadoon
Keyword(s):  
Balance Of Payments ◽  
Data Set ◽  
Positive Direction ◽  
The Real ◽  
Real Gdp ◽  
Long Run ◽  
Short Run ◽  
The Government ◽  
Relationship Of ◽  
Bound Test

Distortion in balance of payments is one of the dominant causes for the sluggish economic condition of Pakistan. The present article has focused to scrutinize the relationship of the balance of payments to its certain determinants that are actually blamable or not for its distortion. The robust ARDL structure has been utilized to develop the bound testing approach to co-integration and error correction models on data set for 1972-2013.The bound test declares that there exists stable long run relationship of balance of payments to its determinants. The upshots indicate that real exchange rate inversely influences the balance of payments not only in the long run but also in the short run. Interest rate inversely affects the balance of payment in the long run but positively affects in the short run .Fiscal balance affects the BOP negatively in the long and short run simultaneously. As regards the real GDP, it moves the BOP in the positive direction in both long and short run. The money supply cast a positive influence on the BOP in the short run but negative effect in the long run. So the need of the hour is that the real GDP of Pakistan should be increased by the deliberate policy of the government. Because it is the GDP that can increase our savings consumption and government expenditures and exports and can improve balance of balance of payment.

Electricity consumption and economic growth in ASEAN

2017 ◽  
Vol 5 (2) ◽  
pp. 16
Author(s):  
Ahmad Ghazali Ismail ◽  
Arlinah Abd Rashid ◽  
Azlina Hanif
Keyword(s):  
Economic Growth ◽  
Energy Use ◽  
Electricity Consumption ◽  
Panel Estimation ◽  
Real Gdp ◽  
Long Run ◽  
Bidirectional Relationship ◽  
Short Run ◽  
Using Data ◽  
The Relationship

The relationship and causality direction between electricity consumption and economic growth is an important issue in the fields of energy economics and policies towards energy use. Extensive literatures has discussed the issue, but the array of findings provides anything but consensus on either the existence of relations or direction of causality between the variables. This study extends research in this area by studying the long-run and causal relations between economic growth, electricity consumption, labour and capital based on the neo-classical one sector aggregate production technology mode using data of electricity consumption and real GDP for ASEAN from the year 1983 to 2012. The analysis is conducted using advanced panel estimation approaches and found no causality in the short run while in the long-run, the results indicate that there are bidirectional relationship among variables. This study provides supplementary evidences of relationship between electricity consumption and economic growth in ASEAN.

scholarly journals ELASTICITY OF SUBSTITUTION AND TECHNICAL PROGRESS: IS THERE A MISSPECIFICATION PROBLEM?

2016 ◽  
Vol 22 (1) ◽  
pp. 101-121 ◽  
Author(s):  
Daniela Federici ◽  
Enrico Saltari
Keyword(s):  
Estimation Procedure ◽  
Elasticity Of Substitution ◽  
Technological Parameters ◽  
Italian Economy ◽  
Spurious Regression ◽  
Long Run ◽  
Correlation Problem ◽  
Short Run ◽  
Modeling Strategy ◽  
Two Parameters

In previous work, we estimated a dynamic model of the Italian economy, showing that its weakness in the past two decades is mainly due to the slowdown in total factor productivity growth. In those models, two parameters play a key role: technological progress and the elasticity of substitution. Recent estimates of those parameters are affected, in our opinion, by a specification problem: technological parameters are inherently long-run but their estimates are based on short-run data. Looking deeply into the estimation procedure, we show that the misspecification issue present in the estimates gives rise to a spurious regression bias (high R2, low DW), because the standard approach does not incorporate frictions and rigidities. Our modeling strategy takes account of them. Although we cannot in general say that our framework gets rid of the serial correlation problem, the statistics for our model do show that residuals are not serially correlated.

scholarly journals Dynamic Analysis of Structural Shifts of Fiscal Revenue in Nigeria, 1999-2016

2016 ◽  
Vol 8 (11) ◽  
pp. 96
Author(s):  
Mustapha A. Akinkunmi
Keyword(s):  
Data Availability ◽  
Government Revenue ◽  
Excise Duty ◽  
Tax Revenues ◽  
Real Gdp ◽  
Crude Oil Prices ◽  
Long Run ◽  
Short Run ◽  
Oil Sector ◽  
The Government

The oil sector that eased the financial constraint of Nigerian government in the 1970s is presently acting as the source of financial constraints to the country due to a continuous decline in government revenue, arising from the recent drastic fall in world crude oil prices. This calls for the government to diversify its revenue base through improving taxation. This study examined the influence of economic performance on the government revenue as well as the various sources of tax revenues in Nigeria. Monthly data spanning 1999 to 2016 were utilized to estimate vector error correction models (VECM) for five sources of government tax revenues based on data availability. Empirical results revealed that there is a significant relationship between real GDP and real company income tax revenues, and between real GDP and real excise duty revenues in the long run. However, in the short run, the one-year lag of tax revenue varieties poses a significant influence on the various sources of tax revenues.

scholarly journals Investigating in the J-curve phenomenon in Tunisia- ARDL bound test approach

2020 ◽  
Vol 12 (5(J)) ◽  
pp. 23-32
Author(s):  
Elham Shubaita ◽  
Muhammad Mar’i ◽  
Mehdi Seraj
Keyword(s):  
Trade Balance ◽  
Real Exchange Rates ◽  
Distributed Model ◽  
Long Run ◽  
J Curve ◽  
Short Run ◽  
Using Data ◽  
Bound Test ◽  
The Relationship ◽  
Ardl Bound Test

This paper investigates the relationship between trade balance, real exchange rates, and incomes in Tunisia by adopting the autoregressive distributed model (ARDL) by using data over the period of 1980 to 2018. We also used the bound test cointegration between variables at a 10% significant level. Our findings show that the Tunisia economy does not match the Marshall-Lerner condition in the long run, that provides an accurate description of the particular situation for which a country currency devaluation or depreciation its currency under both fixed or floating regime is predicted to enhance the trade balance of a country, which means there is no j-curve phenomenon in the long run, which tries to differentiate between the change of short-run and long-run effects in the change of exchange rate on the trade balance. Our findings match the Marshall-Lerner condition in the short run and can confirm the existing j-curve in the case of Tunisia.

scholarly journals AID AND GROWTH IN BANGLADESH: A REASSESSMENT

2018 ◽  
pp. 422-440
Author(s):  
Sharif Hossain ◽  
Rajarshi Mitra ◽  
Thasinul Abedin
Keyword(s):  
Economic Growth ◽  
Foreign Aid ◽  
Inflation Rate ◽  
Government Expenditure ◽  
Real Income ◽  
Domestic Investment ◽  
Real Gdp ◽  
Long Run ◽  
Short Run ◽  
Per Capita

Although the amount of foreign aid received by Bangladesh as a share of GDP has declined over the years, Bangladesh remains one of the heavily aiddependent countries in Asia. The results of most empirical studies that have examined the effectiveness of foreign aid or other forms of development assistance for economic growth have varied considerably depending on the econometric methodology used and the period of study. As the debate and controversy over aid-effectiveness for economic growth continue to grow, this paper reinvestigates the short-run and long-run effects of foreign aid received on percapita real income of Bangladesh over the period 1972–2015. A vector error correction model is estimated. The results indicate lack of any significant short-run and long-run relation between foreign aid and per-capita real income. Results further indicate short-run unidirectional causalities from per-capita real GDP to domestic investment (in proportion to GDP), from government expenditure (in proportion to GDP) to inflation rate, from inflation rate to domestic investment (in proportion to GDP), and from domestic investment to foreign aid (as percentages of GDP). Short-run bidirectional causality is observed between per-capita electricity consumption and per-capita real GDP, and between per-capita real GDP and government expenditure (in proportion to GDP).

scholarly journals Do Migrant Remittances Spur Financial Development in Pakistan?evidence From Linear and Nonlinear Ardl Approach

2020 ◽  
Vol 5 (4) ◽  
Author(s):  
Muhammad Faheem ◽  
Azali Mohamed ◽  
Fatima Farooq ◽  
Sajid Ali
Keyword(s):  
Financial Development ◽  
Asymmetric Effect ◽  
Distributed Lag ◽  
Nonlinear Ardl ◽  
Real Gdp ◽  
Long Run ◽  
Potential Gain ◽  
Ardl Approach ◽  
Migrant Remittances ◽  
Bound Test

The study asseses the influence of  migrant remittances on financial development over the period of 1976-2018 in Pakistan. This study has applied the linear autoregressive distributive lag (ARDL) model and nonlinear autoregressie distributed lag (NARDL) model to check the symmetric and asymmetric effect of remittances. Results of the ARDL and NARDL bound test confirm remittances, FDI, real GDP and inflation significantly contributing to financial development. The outcomes of ARDL and NARDL have also confirmed the significant positive effect of  migrant remittances on financial development in long-run. The asymmetric ARDL  results show the existence of remittances nonlinear effect  on financial development. Specifically, the study found remittances decrease have a significant impact while remittances increase have no any significant effect on financial development. Based on findings, this study recommends the plan for the policymakers of recipient countries, especially Pakistan, could harvest the potential gain of migrant remittances though positive asymmetric association with financial sector development.

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