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Dynamic effect of legal complexity on the value added tax in Mexico

Author

Listed:
  • Javier Moreno

    (Universidad Panamericana)

  • Leovardo Mata

    (Universidad Anáhuac México)

  • Jaime Humberto Beltrán

    (Universidad Anáhuac México; Instituto Tecnológico Superior de Tantoyuca)

  • Griselda Dávila

    (Universidad Panamericana)

Abstract

This paper studies legal complexity and its dynamic relationship with the Value Added Tax Law, from its original version published in 1978 to the current version. To this end, the variables structure, entropy, and interdependence of the legal texts associated with the VAT Law constitute the complexity index. A VAR model then finds evidence of Granger causality between legal complexity and VAT, although no cointegration relationship exists. Furthermore, an inverse relationship between the variables is confirmed, quantifying the short-term effect of legal complexity and comparing it for robustness with the estimation of an ARIMAX and generalized OLS model.

Suggested Citation

  • Javier Moreno & Leovardo Mata & Jaime Humberto Beltrán & Griselda Dávila, 2025. "Dynamic effect of legal complexity on the value added tax in Mexico," Economics Bulletin, AccessEcon, vol. 45(4), pages 1710-1722.
    • Handle: RePEc:ebl:ecbull:eb-25-00402
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    JEL classification:

    • H8 - Public Economics - - Miscellaneous Issues
    • K3 - Law and Economics - - Other Substantive Areas of Law

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