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The three linkages between investment, tax revenues and growth in Tunisia: econometric model

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  • Jamel Eddine Mkadmi

    (The Higher Institute of Business Administration of Gafsa)

  • Sayef Bakari

    (University of Jendouba)

  • Ameni Othmani

    (The Higher Institute of Business Administration of Gafsa)

Abstract

The goal of the present study is to investigate the causality connection between domestic investment, tax revenues, and economic growth in Tunisia over the period 1976–2018. To achieve our aim, we implemented an empirical estimation based on correlation analysis, co-integration analysis, and Vector Error Correction Model. Empirical results indicate that in the long run, domestic investment has a negative impact on economic growth, while the impact of tax revenues is positive. Also, we found that domestic investment and economic growth influence positively tax revenues. However, we discover Tax revenue and economic growth don’t have any effect on domestic investment in the long run. This shows that Tunisia’s tax policy is not safe for domestic investment, and domestic investment policy is not safe for economic growth. As a result, we should promote rapid action to take the essential actions before the issue escalates into a huge calamity.

Suggested Citation

  • Jamel Eddine Mkadmi & Sayef Bakari & Ameni Othmani, 2025. "The three linkages between investment, tax revenues and growth in Tunisia: econometric model," SN Business & Economics, Springer, vol. 5(11), pages 1-19, November.
    • Handle: RePEc:spr:snbeco:v:5:y:2025:i:11:d:10.1007_s43546-025-00939-z
    DOI: 10.1007/s43546-025-00939-z
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