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Relationship between rule of law and tax revenues: dynamic panel data analysis
Article | Year: 2022 | Pages: 403 - 419 | Volume: 46 | Issue: 3 Received: September 6, 2021 | Accepted: April 28, 2022 | Published online: August 29, 2022
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FULL ARTICLE
FIGURES & DATA
REFERENCES
CROSSMARK POLICY
METRICS
LICENCING
PDF
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Variables
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Period
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Frequency
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Source
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Symbol
|
|
Tax
Revenue (GDP %)
|
2002-2018
|
Annual
|
World Bank
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TR
|
|
Rule
of Law
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2002-2018
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Annual
|
World Bank
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RL
|
|
Import
(GDP %)
|
2002-2018
|
Annual
|
World Bank
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ImGDP
|
|
GDP
Per Capita
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2002-2018
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Annual
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World Bank
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GDPPC
|
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Agriculture
Sector (GDP %)
|
2002-2018
|
Annual
|
World Bank
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Agri
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Industry
(GDP %)
|
2002-2018
|
Annual
|
World Bank
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Ind
|
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Service
(GDP %)
|
2002-2018
|
Annual
|
World Bank
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Ser
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Note: All with annual frequency, in 2002-2018 period, source World Bank. Source: Authors’ preparation.
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Variables
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No. of observations
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Mean
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Std. Deviation
|
Minimum
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Maximum
|
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Tax
Revenue (GDP %)
|
1,003
|
18.67
|
5.75
|
7.03
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48.56
|
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Rule
of Law
|
1,003
|
64.50
|
26.81
|
4
|
100
|
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Import
(GDP %)
|
1,003
|
50.90
|
27.81
|
11.25
|
208.33
|
|
GDP
Per Capita
|
1,003
|
22,675.04
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23,677.72
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474.94
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111,968.3
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Agriculture
Sector (GDP %)
|
1,003
|
5.90
|
6.24
|
0.0284
|
34.55
|
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Industry
(GDP %)
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1,003
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25.23
|
5.93
|
9.88
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45.09
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Service
(GDP %)
|
1,003
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59.02
|
8.25
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35.02
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79.33
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Variables/Tests
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Breusch-Pagan
LM
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Pesaran CD
|
|
TR
|
5711.564(0.000)
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14.786(0.000)
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RL
|
5557.867(0.000)
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3.59 (0.0003)
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ImGDP
|
9028.183
(0.000)
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44.392(0.000)
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GDPPC
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17723.44(0.000)
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110.6822(0.0000)
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Agri
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9371.135
(0.000)
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63.469
(0.0000)
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Service
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9979.556(0.000)
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51.36084(0.0000)
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Indp
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9439.447(0.0000)
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42.49648(0.0000)
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Variables
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Test
Statistic Value
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Probability
|
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TR
|
-4.11287
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0.000
|
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RL
|
-5.38299
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0.000
|
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ImGDP
|
-8.42850
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0.000
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GDPPC
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-5.28732
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0.000
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Agri
|
-10.3820
|
0.000
|
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Service
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-5.27322
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0.000
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Indp
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-5.82446
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0.000
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Dependent
Variable: TRit
|
|
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Independent
Variables
|
(1)
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(2)
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(3)
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TRit-1
|
-0.0409***
(0.006580)
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-0.0786***
(0.005999)
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-0.076729***
(0.007228)
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RLit
|
0.0672***
(0.002716)
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0.0650***
(0.002504)
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0.0666***
(0.001732)
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|
ImGDPit
|
-0.296***
(0.017728)
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-0.3291***
(0.019130)
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-0.3376***
(0.013551)
|
|
Agriit
|
-0.4495***
(0.013394)
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-0.4807***
(0.02472)
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-0.4505
(0.021178)
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Serviceit
|
-.0.3197***
(0.011396)
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-0.3538***
(0.01706)
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-0.3311***
(0.015736)
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Indpit
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0.2133***
(0.014250)
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|
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RLit×KUKit
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|
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3.84E-06***
(3.97E-07)
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RLit×GDPPCit
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|
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-0.000374***
(3.44E-05)
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GDPPCit
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-0.0409***
(0.006580)
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-0.0786***
(0.005999)
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-0.076729***
(0.007228)
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Sargan
Test
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53.23329
(0.42)
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54.3208
(0.38)
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54.30157
(1.000)
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AR(1)
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(0.044)
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(0.045)
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(0.0038)
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AR
(2)
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(0.777)
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(0.842)
|
0.2255
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Note: *** shows that the variables are statistically significant at the 1% significance level. The instrumental variables used in the model based on the probability values of the Sargan Test are valid. Furthermore, contrary to the expectations, there is no autocorrelation problem in the model according to the AR (2) probability value. Source: Authors’ calculation.
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Countries
=>20.000 $
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Australia,
Austria, Belgium, Cyprus, Czechia, Denmark, Finland, France, Germany, Greece,
Hungary, Iceland, Ireland, Israel, Italy, Luxemburg, Netherland, Norway,
Portugal, Singapore, Slovenia, Spain, Sweden, Switzerland, United Kingdom
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Countries
<20.000 $
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Argentina,
Belarus, Bhutan, Brazil, Bulgaria, Burkina, Cambodia, Costa Rica, Cote d’Ivoire,
El Salvador, Estonia, Georgia, Guatemala, Jamaica, Jordan, Latvia, Lebanon,
Lithuania, Croatia Mauritius, Moldova, Morocco, Nicaragua, Peru, Philippines,
Poland, Romania, Russia, Slovakia, South Africa, Sri Lanka, Thailand, Ukraine,
Zambia
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Table 1Descriptive definition of variables DISPLAY Table
Table 2Summary statistics of the data DISPLAY Table
Table 3Cross-sectional dependency test results DISPLAY Table
Table 4The results of the Im-Pesaran-Shin unit root test DISPLAY Table
Table 5Dynamic panel data estimation results DISPLAY Table
Table 6Classification of countries according to threshold value DISPLAY Table
* The authors would like to thank two anonymous referees for their useful comments and suggestions.
1 Australia, Austria, Belgium, Cyprus, Czechia, Denmark, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Israel, Italy, Luxemburg, Netherlands, Norway, Portugal, Singapore, Slovenia, Spain, Sweden, Switzerland, United Kingdom, Argentina, Belarus, Bhutan, Brazil, Bulgaria, Burkina, Cambodia, Costa Rica, Cote d’Ivoire, El Salvador, Estonia, Georgia, Guatemala, Jamaica, Jordan, Latvia, Lebanon, Lithuania, Croatia, Mauritius, Moldova, Morocco, Nicaragua, Peru, Philippines, Poland, Romania, Russia, Slovakia, South Africa, Sri Lanka, Thailand, Ukraine, Zambia.
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September, 2022
III/2022 |
