IDEAS home Printed from https://ideas.repec.org/a/mup/actaun/actaun_2017065031023.html
   My bibliography  Save this article

Modelling Oil‑Sector Dependency of Tax Revenues in a Resource Rich Country: Evidence from Azerbaijan

Author

Listed:
  • Akif Musayev

    (Institute of Economics, Azerbaijan National Academy of Sciences, Baku, Azerbaijan
    Near East University, Nicosia, TRNC
    Azerbaijan University, Baku, Azerbaijan
    Azerbaijan State Oil and Industrial University, Baku, Azerbaijan)

  • Khatai Aliyev

    () (Department of World Economy, Baku Engineering University, Khirdalan, Azerbaijan
    Institute of Control Systems, Azerbaijan National Academy of Sciences, Baku, Azerbaijan)

Abstract

Forecasting tax revenues is an important issue in budget planning. As a resource rich country, Azerbaijan’s budget revenues is severely depend on oil price and production levels. This study investigates oil sector dependency of state budget tax revenues in case of Azerbaijan by employing FMOLS, DOLS and CCR cointegration methods for the period of 2000Q1 – 2015Q2. Empirical results indicate statistically and economically significant positive long‑run impact of both oil related factors on tax revenues. Considering current fiscal challenges in the country, research findings are very useful for policy purposes and fills the gap in the literature by drawing mechanism of the association and estimating the relationship empirically.

Suggested Citation

  • Akif Musayev & Khatai Aliyev, 2017. "Modelling Oil‑Sector Dependency of Tax Revenues in a Resource Rich Country: Evidence from Azerbaijan," Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis, Mendel University Press, vol. 65(3), pages 1023-1029.
  • Handle: RePEc:mup:actaun:actaun_2017065031023
    DOI: 10.11118/actaun201765031023
    as

    Download full text from publisher

    File URL: https://acta.mendelu.cz/media/pdf/actaun_2017065031023.pdf
    Download Restriction: no

    File URL: https://acta.mendelu.cz/65/3/1023/
    Download Restriction: no

    References listed on IDEAS

    as
    1. Park, Joon Y, 1992. "Canonical Cointegrating Regressions," Econometrica, Econometric Society, vol. 60(1), pages 119-143, January.
    2. Katsuya Ito, 2012. "The impact of oil price volatility on the macroeconomy in Russia," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 48(3), pages 695-702, June.
    3. Peter C. B. Phillips & Bruce E. Hansen, 1990. "Statistical Inference in Instrumental Variables Regression with I(1) Processes," Review of Economic Studies, Oxford University Press, vol. 57(1), pages 99-125.
    4. Lutz Kilian, 2008. "Exogenous Oil Supply Shocks: How Big Are They and How Much Do They Matter for the U.S. Economy?," The Review of Economics and Statistics, MIT Press, vol. 90(2), pages 216-240, May.
    5. Stock, James H & Watson, Mark W, 1993. "A Simple Estimator of Cointegrating Vectors in Higher Order Integrated Systems," Econometrica, Econometric Society, vol. 61(4), pages 783-820, July.
    6. M. Hakan Berument & Nildag Basak Ceylan & Nukhet Dogan, 2010. "The Impact of Oil Price Shocks on the Economic Growth of Selected MENA1 Countries," The Energy Journal, International Association for Energy Economics, vol. 0(Number 1), pages 149-176.
    7. Hamilton, James D., 2003. "What is an oil shock?," Journal of Econometrics, Elsevier, vol. 113(2), pages 363-398, April.
    8. Omar Mendoza & David Vera, 2010. "The Asymmetric Effects of Oil Shocks on an Oil-exporting Economy," Latin American Journal of Economics-formerly Cuadernos de Economía, Instituto de Economía. Pontificia Universidad Católica de Chile., vol. 47(135), pages 3-13.
    9. Hanabusa, Kunihiro, 2009. "Causality relationship between the price of oil and economic growth in Japan," Energy Policy, Elsevier, vol. 37(5), pages 1953-1957, May.
    10. Amaira Bouzid, 2012. "The Relationship of Oil Prices and Economic Growthin Tunisia: A Vector Error Correction Model Analysis," Romanian Economic Journal, Department of International Business and Economics from the Academy of Economic Studies Bucharest, vol. 15(43), pages 3-22, March.
    11. Lutz Kilian & Robert J. Vigfusson, 2011. "Are the responses of the U.S. economy asymmetric in energy price increases and decreases?," Quantitative Economics, Econometric Society, vol. 2(3), pages 419-453, November.
    12. Khatai Aliyev & Ilkin Gasimov, 2018. "Fiscal policy implementation in Azerbaijan before, during and after the oil boom," Contemporary Economics, University of Economics and Human Sciences in Warsaw., vol. 12(1), March.
    13. Edesiri Godsday Okoro, 2014. "Oil Price Volatility and Economic Growth in Nigeria: a Vector Auto-Regression (VAR) Approach," Acta Universitatis Danubius. OEconomica, Danubius University of Galati, issue 10(1), pages 70-82, February.
    14. Khatai Aliyev & Bruce Dehning & Orkhan Nadirov, 2016. "Modelling the Impact of Fiscal Policy on Non‑Oil Gdp in a Resource Rich Country: Evidence from Azerbaijan," Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis, Mendel University Press, vol. 64(6), pages 1869-1878.
    15. Du, Limin & Yanan, He & Wei, Chu, 2010. "The relationship between oil price shocks and China's macro-economy: An empirical analysis," Energy Policy, Elsevier, vol. 38(8), pages 4142-4151, August.
    16. François Lescaroux & Valérie Mignon, 2008. "On the influence of oil prices on economic activity and other macroeconomic and financial variables ," OPEC Energy Review, Organization of the Petroleum Exporting Countries, vol. 32(4), pages 343-380, December.
    17. MacKinnon, James G, 1996. "Numerical Distribution Functions for Unit Root and Cointegration Tests," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 11(6), pages 601-618, Nov.-Dec..
    18. Kilian, Lutz & Vigfusson, Robert J., 2011. "Nonlinearities In The Oil Price–Output Relationship," Macroeconomic Dynamics, Cambridge University Press, vol. 15(S3), pages 337-363, November.
    19. Pradhan, Rudra P. & Arvin, Mak B. & Ghoshray, Atanu, 2015. "The dynamics of economic growth, oil prices, stock market depth, and other macroeconomic variables: Evidence from the G-20 countries," International Review of Financial Analysis, Elsevier, vol. 39(C), pages 84-95.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Khatai Aliyev & Altay Ismayilov & Ilkin Gasimov, 2019. "Modelling Elasticity of Non‑Oil Tax Revenues to Oil Price Changes: is There U‑Shaped Association? Evidence from Azerbaijan," Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis, Mendel University Press, vol. 67(3), pages 799-810.
    2. Sugra Ingilab Humbatova & Natig Qadim-Oglu Hajiyev, 2019. "Oil Factor in Economic Development," Energies, MDPI, Open Access Journal, vol. 12(8), pages 1-1, April.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:mup:actaun:actaun_2017065031023. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Bohumir Valter). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.