4 research outputs found
Analyzing Tax Policy and Economic Growth by Using Semi-Parametric Approach
Abstract. Due to complexities in measuring the impact of tax policy on economic growth, there is need to explore functional relationship between response and predictors. Semi-parametric approaches are often very handy in modeling relationships which are non-linear but cant be completely described either through parametric or non-parametric approaches. To determine the effects of tax policy on economic growthfunctional, cubic smoothing spline method is used along with cross validation test to control the smoothing parameter. To replace the functional form of smoothing coefficients into linear mixed model, maximum likelihood estimation is used. Results indicate that proposed methodology is robust in determining functional form and in achieving increasing average marginal tax rates has negative impact on economic growth results. Empirical results indicate that high AMTRs and population growth rate reduce the performance of economic growth in the developing countries. A reduction on dependence of AMTRs in South Asian countries is needed.Keywords: Spline smoothing method, Semi-parametric, Tax structure, Economic growth, Average marginal tax rate.JEL. H26, O40, C14, H71
The Impact of Counter-terrorism Effectiveness on Economic Growth of Pakistan: An Econometric Analysis
Abstract
The purpose of present study is to explore theoretically and empirically the impact of counterterrorism effectiveness on economic growth of Pakistan. The data for counter-terrorism components construct from GTD and data for growth variables gathered from WDI for the time 1980 to 2015. This study developed “negative binomial regression model” for investigating the magnitude and significance of counter-terrorism effectiveness. It also uses the ARDL bound test and causality analysis for examining the causal relationship between economic growth and counter-terrorism effectiveness. This study further identifies that there are three types of proactive strategies used by Government and military authorities to reduce violence: civilian policies, peace accords and military operations. The result shows that there are long term impacts of counter-terrorism policies on economic growth. The findings also imply that counter-terrorism strategies may not be able to restrict violence and incapacitate militant’s organization and their sleeper cell if it lacks strong political support. The present work is raw evidence for the effort level of authorities and their preemptive strategies that leads to the significant breakdown effect to curb terrorism across the country
Tax incentives and environmental protection: evidence from Sweden's taxpayers' level data
Tax incentives such as investment tax credit and taxable income deductions related to the environment and climate change are becoming more popular. Introducing tax incentives related to the environment and climate change helps meet the sustainability objectives of growth and development. Many countries worldwide are taking serious steps to counter the mounting challenges due to changing climatic conditions. To meet the sustainability goals, Sweden has set a goal to lower greenhouse gas emissions by 55% in 2030 compared to 1990. In this regard, it is imperative to reflect on the tax incentives provided by the Swedish government in terms of the investment tax credit. It is significant to investigate the beneficiaries of the Swedish government's tax incentives. We selected the top 100 listed companies on the Swedish stock market, Nasdaq Stockholm, to answer this question from 2017 to 2019. Our dependent variable is a dummy indicating 1 for firms who took advantage of the investment tax credit and 0 otherwise. We use ESG scores to construct our dependent variable. Because a higher ESG score reflects a more sustainable approach to production by firms. Therefore, we use dummy 1 for firms on the top of ESG ranking and 0 otherwise. We use different firm-level characteristics as the independent variables, such as age, size, investment, capital, assets, capacity, net capital, and net income. We use a longitudinal research design because sample observations vary across firms and over a short time. We conduct probit and logistic regression to identify the beneficiaries of the tax incentives. The study's findings show that different firm-level characteristics significantly impact the probability of being an ITC beneficiary. For instance, domestic enterprises are more likely to benefit from tax incentives than foreign enterprises, but the relationship is insignificant. In the same way, firms with a maximum number of employees and capital stock are more likely to benefit from the tax incentives than firms with lower capital stocks and limited employees. Our findings also show that firms with higher amounts of new investment in fixed assets are more likely to benefit from the tax incentives. Finally, we found a statistically significant coefficient for firm capacity, an indicator of total inventory. Specifically, the higher the capacity of a firm, the more it is likely to be an ITC beneficiary.
Tax incentives and environmental protection: evidence from Sweden's taxpayers' level data
Tax incentives such as investment tax credit and taxable income deductions related to the environment and climate change are becoming more popular. Introducing tax incentives related to the environment and climate change helps meet the sustainability objectives of growth and development. Many countries worldwide are taking serious steps to counter the mounting challenges due to changing climatic conditions. To meet the sustainability goals, Sweden has set a goal to lower greenhouse gas emissions by 55% in 2030 compared to 1990. In this regard, it is imperative to reflect on the tax incentives provided by the Swedish government in terms of the investment tax credit. It is significant to investigate the beneficiaries of the Swedish government's tax incentives. We selected the top 100 listed companies on the Swedish stock market, Nasdaq Stockholm, to answer this question from 2017 to 2019. Our dependent variable is a dummy indicating 1 for firms who took advantage of the investment tax credit and 0 otherwise. We use ESG scores to construct our dependent variable. Because a higher ESG score reflects a more sustainable approach to production by firms. Therefore, we use dummy 1 for firms on the top of ESG ranking and 0 otherwise. We use different firm-level characteristics as the independent variables, such as age, size, investment, capital, assets, capacity, net capital, and net income. We use a longitudinal research design because sample observations vary across firms and over a short time. We conduct probit and logistic regression to identify the beneficiaries of the tax incentives. The study's findings show that different firm-level characteristics significantly impact the probability of being an ITC beneficiary. For instance, domestic enterprises are more likely to benefit from tax incentives than foreign enterprises, but the relationship is insignificant. In the same way, firms with a maximum number of employees and capital stock are more likely to benefit from the tax incentives than firms with lower capital stocks and limited employees. Our findings also show that firms with higher amounts of new investment in fixed assets are more likely to benefit from the tax incentives. Finally, we found a statistically significant coefficient for firm capacity, an indicator of total inventory. Specifically, the higher the capacity of a firm, the more it is likely to be an ITC beneficiary.