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Effects of taxation on software piracy across the European Union

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  • Nicolas Dias Gomes
  • Pedro André Cerqueira
  • Luís Alçada-Almeida

Abstract

This paper explores the relation between levels of taxation among different types of households in the European Union and the levels of software piracy from 1996 to 2010. It extends previous works introducing a large panel data set for the European Union and its different regions. We estimate our model using the fixed effect, comparing results from the Euro Area and the Countries that joined EU in 2004 and 2007. Results show that levels of taxation increase the levels of software piracy losses; moreover these results depend on marital status and number of children. The weight of taxation on GDP, namely the taxes on consumption, have a positive effect on piracy losses while the impact of inflation is negative and marginal. Additional to this we also found that the relative importance of these taxes in relation to total taxation can affect this phenomenon. An increase in the weight of capital taxation would decrease software piracy while this effect was opposite when considering the relative importance of consumption taxes.

Suggested Citation

  • Nicolas Dias Gomes & Pedro André Cerqueira & Luís Alçada-Almeida, 2014. "Effects of taxation on software piracy across the European Union," 2014 Papers pgo476, Job Market Papers.
    • Handle: RePEc:jmp:jm2014:pgo476
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    1. Hausman, Jerry, 2015. "Specification tests in econometrics," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 38(2), pages 112-134.
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    3. Rajeev Goel & Michael Nelson, 2009. "Determinants of software piracy: economics, institutions, and technology," The Journal of Technology Transfer, Springer, vol. 34(6), pages 637-658, December.
    4. Choi, In, 2001. "Unit root tests for panel data," Journal of International Money and Finance, Elsevier, vol. 20(2), pages 249-272, April.
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    Cited by:

    1. Nicolas Dias Gomes & Pedro André Cerqueira & Luís Alçada Almeida, 2015. "Education and Software Piracy in the European Union," GEMF Working Papers 2015-07, GEMF, Faculty of Economics, University of Coimbra.
    2. Simplice A. Asongu & Antonio R. Andrés, 2017. "The impact of software piracy on inclusive human development: evidence from Africa," International Review of Applied Economics, Taylor & Francis Journals, vol. 31(5), pages 585-607, September.

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    More about this item

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
    • O52 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Europe

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