Cover Image

Impact of trade liberalization on tax revenues and tax structures in developing countries

Trade liberalization tends to be an intrinsic part of structural adjustment programs due to its presumed beneficial effects on growth. However, trade reform policies can have fiscal effects that hinder growth and development. This dissertation takes a critical look at the effect of trade liberalizat...

Full description

Saved in:
Bibliographic Details
Main Author: Karimi, Mohammad
Format: Thesis
Language:English
Published: 2016
Subjects:
Free trade
Tax collection
Online Access:http://psasir.upm.edu.my/id/eprint/69469/1/FEP%202016%2022%20-%20IR.pdf
http://psasir.upm.edu.my/id/eprint/69469/
Tags: Add Tag
No Tags, Be the first to tag this record!
id my.upm.eprints.69469
record_format eprints
spelling my.upm.eprints.694692020-02-04T03:46:40Z http://psasir.upm.edu.my/id/eprint/69469/ Impact of trade liberalization on tax revenues and tax structures in developing countries Karimi, Mohammad Trade liberalization tends to be an intrinsic part of structural adjustment programs due to its presumed beneficial effects on growth. However, trade reform policies can have fiscal effects that hinder growth and development. This dissertation takes a critical look at the effect of trade liberalization on taxation in developing countries. The study intends to (a) investigate the impact of trade liberalization on international trade tax revenue in developing countries and examine whether this impact is conditioned by the level of trade liberalization; (b) explore the empirical nexus between trade liberalization and total tax revenues and examine whether this relationship is contingent on the level of trade liberalization and countries’ characteristics (such as level of national income and countries’ dependency on oil revenues) in developing countries; and (c) analyze the impact of trade liberalization on the tax structures in developing countries. For the first and second objectives, a dynamic panel threshold regression approach is utilized on panel data of 103 developing countries covering the period of 1993-2012. While for the third objective, a fixed effects regression framework is performed by using panel data for 97 developing countries over 1993-2012. The findings for the first objective suggest a non-linear relationship between tariff rate and international trade tax revenue and revealing an evidence of potential Laffer curve effect. Concerning the link between trade liberalization and total tax revenues (second objective), the results show a non-linear relationship, implying that the impact of trade liberalization on total tax revenues is negative initially, but when trade openness exceeds the detected threshold level of trade openness, this negative effect will be changed to a significant positive effect. The results further indicate that the relationship between trade liberalization and total tax revenues is contingent on level of national income and oil revenues. As for the third objective, the findings indicate that the impacts of trade liberalization on tax structures are sensitive to the different measures of trade liberalization. While trade openness does not have a significant impact on all kinds of tax shares in developing countries, reduction of tariff rates and WTO membership seems to contribute to the changes in the tax structures in these countries. Inconclusion, trade liberalization seems to play an important role in determining the international trade tax revenue, total tax revenues, and tax structures in developing countries. The findings of this research provide important policy implications for trade liberalization and taxation strategies of developing countries. Generally, providing a favorable environment and infrastructure with a stable trade policy and effective trade regulation is a significant task facing most of the developing countries. 2016-06 Thesis NonPeerReviewed text en http://psasir.upm.edu.my/id/eprint/69469/1/FEP%202016%2022%20-%20IR.pdf Karimi, Mohammad (2016) Impact of trade liberalization on tax revenues and tax structures in developing countries. Doctoral thesis, Universiti Putra Malaysia. Free trade Tax collection
institution Universiti Putra Malaysia
building UPM Library
collection Institutional Repository
continent Asia
country Malaysia
content_provider Universiti Putra Malaysia
content_source UPM Institutional Repository
url_provider http://psasir.upm.edu.my/
language English
topic Free trade
Tax collection
spellingShingle Free trade
Tax collection
Karimi, Mohammad
Impact of trade liberalization on tax revenues and tax structures in developing countries
description Trade liberalization tends to be an intrinsic part of structural adjustment programs due to its presumed beneficial effects on growth. However, trade reform policies can have fiscal effects that hinder growth and development. This dissertation takes a critical look at the effect of trade liberalization on taxation in developing countries. The study intends to (a) investigate the impact of trade liberalization on international trade tax revenue in developing countries and examine whether this impact is conditioned by the level of trade liberalization; (b) explore the empirical nexus between trade liberalization and total tax revenues and examine whether this relationship is contingent on the level of trade liberalization and countries’ characteristics (such as level of national income and countries’ dependency on oil revenues) in developing countries; and (c) analyze the impact of trade liberalization on the tax structures in developing countries. For the first and second objectives, a dynamic panel threshold regression approach is utilized on panel data of 103 developing countries covering the period of 1993-2012. While for the third objective, a fixed effects regression framework is performed by using panel data for 97 developing countries over 1993-2012. The findings for the first objective suggest a non-linear relationship between tariff rate and international trade tax revenue and revealing an evidence of potential Laffer curve effect. Concerning the link between trade liberalization and total tax revenues (second objective), the results show a non-linear relationship, implying that the impact of trade liberalization on total tax revenues is negative initially, but when trade openness exceeds the detected threshold level of trade openness, this negative effect will be changed to a significant positive effect. The results further indicate that the relationship between trade liberalization and total tax revenues is contingent on level of national income and oil revenues. As for the third objective, the findings indicate that the impacts of trade liberalization on tax structures are sensitive to the different measures of trade liberalization. While trade openness does not have a significant impact on all kinds of tax shares in developing countries, reduction of tariff rates and WTO membership seems to contribute to the changes in the tax structures in these countries. Inconclusion, trade liberalization seems to play an important role in determining the international trade tax revenue, total tax revenues, and tax structures in developing countries. The findings of this research provide important policy implications for trade liberalization and taxation strategies of developing countries. Generally, providing a favorable environment and infrastructure with a stable trade policy and effective trade regulation is a significant task facing most of the developing countries.
format Thesis
author Karimi, Mohammad
author_facet Karimi, Mohammad
author_sort Karimi, Mohammad
title Impact of trade liberalization on tax revenues and tax structures in developing countries
title_short Impact of trade liberalization on tax revenues and tax structures in developing countries
title_full Impact of trade liberalization on tax revenues and tax structures in developing countries
title_fullStr Impact of trade liberalization on tax revenues and tax structures in developing countries
title_full_unstemmed Impact of trade liberalization on tax revenues and tax structures in developing countries
title_sort impact of trade liberalization on tax revenues and tax structures in developing countries
publishDate 2016
url http://psasir.upm.edu.my/id/eprint/69469/1/FEP%202016%2022%20-%20IR.pdf
http://psasir.upm.edu.my/id/eprint/69469/
_version_ 1662756465315676160
score 13.211869

Similar Items