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Cumulative analysis of dependence government tax behaviour on economy’s efficiency factors for totality the world countries

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  • Sokolovskyi, Dmytro

Abstract

The article deals with an investigation of principles, factors, and conditions of the government tax behaviour by changing the tax rate. The research base is all countries in the world for which statistics are available. We define a set of potential indicators of the economic efficiency, based on GDP and FDI, nominal and per capita, as well as the ratio of FDI to GDP. By using the statistical analysis techniques we found a correlation between government behaviour and each of the selected indicators. In order to reduce the randomness of the results, we carry out cumulative testing of the hypothesis of independence of government tax behaviour from the efficiency of the economy for all possible partitions of the countries' totality with different interrelations of the countries’ sets behaviour with different economic efficiency levels. Based on the research, it can be argued that government tax behaviour, in general, is not maximizer behaviour. We argue that the factors GDP, FDI, and GDP per capita have the biggest impact on the government tax decisions. The obtained results allow to understand the principles of governments’ decision-making, and, therefore, to forecast in some way their behaviour in certain economic conditions. In particular, partitions accumulations can help identify behavioural trends. The present paper differs from previous studies both by the topic, studying the relations between government’s tax behavior and efficiency of countries' economies and by the approach to define this dependence, since the latest can be observed only when each variant of government’s tax reaction is analyzed separately.

Suggested Citation

  • Sokolovskyi, Dmytro, 2019. "Cumulative analysis of dependence government tax behaviour on economy’s efficiency factors for totality the world countries," MPRA Paper 95827, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:95827
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    References listed on IDEAS

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    1. Sokolovskyi, Dmytro, 2021. "Is tax competition necessarily a Race to the bottom? Optimal tax rate trajectories in the model of tax competition for different objective functions," MPRA Paper 109284, University Library of Munich, Germany.

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    More about this item

    Keywords

    economic efficiency; tax rate; government tax behaviour; CIT; GDP; FDI; per capita;
    All these keywords.

    JEL classification:

    • C12 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Hypothesis Testing: General
    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • H30 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - General

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