Μία εμπειρική διερεύνηση της επίδρασης των φόρων στην οικονομική μεγέθυνση για τις χώρες του ΟΟΣΑ

Βασιλόπουλος, Γεώργιος

An empirical investigation of the impact of taxes on economic growth for OECD countries

Master Thesis

Author

Βασιλόπουλος, Γεώργιος

Date

2016-07

Abstract

This master thesis analyzes the effect of taxes on economic growth in a sample of thirty countries of the Organization of Economic Cooperation and Development (OECD) covering the period 2000 – 2012. The data being used are panel data and the estimations were performed with the help of the statistical package STATA MP 13. Moreover, because the above time period includes years in which the global financial and economic crisis (2008 - 2012) took place, an analysis of the effect of taxes on economic growth before and after the appearance of this crisis with the help of a dummy time variable (year dummy) was performed. Initially, the assessment methods applied are those of Ordinary Least Squares (OLS), Fixed Effects and Random Effects. With the help of the Breusch – Pagan and Hausman tests, it was proved that the method of Fixed Effects best describes the impact of all tested tax categories (personal income taxes, corporate income taxes, consumption taxes and property taxes) on economic growth. More specifically, corporate income taxes and consumption taxes have a positive effect on economic growth, but only corporate income taxes show a statistically significant effect at the 5% significance level. On the other hand, personal income taxes and property taxes have a negative but not statistically significant effect on economic growth. Also, at the aggregate level taxes have a positive but not statistically significant effect on economic growth in all tested tax categories. However, these results are diversified significantly by using the dummy time variable (year dummy) separating the sample of this research into two periods; before and after the 2008 global financial and economic crisis. By using this dummy variable, it was proved that consumption and property taxes keep the same signs in relation to the initial results, but now showing statistical significance at the 5% significance level, while corporate income taxes show this time a negative, but not statistically significant effect on economic growth. Furthermore, personal income taxes still have a negative but not statistically significant effect on economic growth. Finally, at the aggregate level taxes have a negative and statistically significant effect on economic growth in all examined cases during the financial and economic crisis, which confirms the results in the corresponding literature. Due to the small sample time period and in order to further test the reliability of the results arising from the Robust Fixed Effects method for all examined types of taxes, the generalized method of moments in two stages was implemented. According to this method, it turned out that at the aggregate level taxes have a positive and statistically significant effect on economic growth in all the cases examined, with property taxes being the most beneficial in this direction, while personal income taxes have a negative and statistical significant effect, without their implementation with a progressive rhythm playing an important role. The corporate income taxes have a positive but not statistically significant effect on economic growth, while it was not feasible to draw reliable conclusions for the impact of consumption taxes on economic growth. The above results are partly consistent with the study of Arnold (2008), who concluded that property taxes have a beneficial impact in achieving economic growth, while personal income taxes hinder economic growth. However, our results do not confirm that the implementation of personal income taxes with a progressive rhythm averts economic growth, as the study of Arnold (2008) noted. The positive but not statistically significant effect of corporate income taxes on economic growth only agrees with the findings of the study of Tosun and Abisadeh (2005). Overall, the results of this research show that the correct handling of tax revenues and tax policies from the government agencies is able to lead to economic growth and the creation of investments, but the imposition of tax measures deserves particular attention in times of economic crisis and difficult economic conditions.

Postgraduate Studies Programme

Οικονομική και Επιχειρησιακή Στρατηγική

Department

Σχολή Οικονομικών, Επιχειρηματικών και Διεθνών Σπουδών. Τμήμα Οικονομικής Επιστήμης

Number of pages

139

Language

Greek

URI

https://dione.lib.unipi.gr/xmlui/handle/unipi/9353

Collections

Τμήμα Οικονομικής Επιστήμης

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