Skip to main content
Disciplines
Automotive Business IT + Informatics Construction + Real Estate Electrical Engineering + Electronics Energy + Sustainability Insurance + Risk Finance + Banking Management + Leadership Marketing + Sales Mechanical Engineering + Materials
Events
DE
EN
Books
Journals
Topic Page
Marketing
Start single access now
Access for companies
EXTENDED SEARCH
Log in
Top
Published in:
Taxation and Rebellion: A Historical and Philosophical Perspective Read chapter Read first chapter

2017 | OriginalPaper | Chapter

16. The Impact of Tax Policy on the Economic Growth of Greece

Authors : Grigorios Spirakis, Antonios Sarantidis

Published in: Taxation in Crisis

Publisher: Springer International Publishing

Log in

Activate our intelligent search to find suitable subject content or patents.

search-config
loading …

Abstract

This chapter examines the relationship between tax policy, foreign direct investments, and economic growth. The aim of this chapter is to analyze and to estimate the impact that frequent changes and modifications of tax policies have on the FDI and economic growth of Greece. The sample is based on time series data with annual observations from 1980 to 2014. The empirical part utilizes the methodologies of PCA, OLS regression, GARCH and GARCH-M. In this chapter, tax policy is measured as the annual number of tax legislation changes that have a direct negative impact on the income of citizens and businesses. We construct a new Tax Policy (TP) Index for Greece, by using the Tax Policy variable and five other variables as proxies in this analysis. The results suggest that the new TP Index has negative effects on GDP growth while it has no effects on FDI. The research provides to policy makers insights into the effects that an unstable tax environment has on FDI and economic growth.

Dont have a licence yet? Then find out more about our products and how to get one now:

Springer Professional "Wirtschaft+Technik"

Online-Abonnement

Mit Springer Professional "Wirtschaft+Technik" erhalten Sie Zugriff auf:

  • über 102.000 Bücher
  • über 537 Zeitschriften

aus folgenden Fachgebieten:

  • Automobil + Motoren
  • Bauwesen + Immobilien
  • Business IT + Informatik
  • Elektrotechnik + Elektronik
  • Energie + Nachhaltigkeit
  • Finance + Banking
  • Management + Führung
  • Marketing + Vertrieb
  • Maschinenbau + Werkstoffe
  • Versicherung + Risiko

Jetzt Wissensvorsprung sichern!

inform now

Springer Professional "Wirtschaft"

Online-Abonnement

Mit Springer Professional "Wirtschaft" erhalten Sie Zugriff auf:

  • über 67.000 Bücher
  • über 340 Zeitschriften

aus folgenden Fachgebieten:

  • Bauwesen + Immobilien
  • Business IT + Informatik
  • Finance + Banking
  • Management + Führung
  • Marketing + Vertrieb
  • Versicherung + Risiko




Jetzt Wissensvorsprung sichern!

inform now
previous chapter Taxes as Barriers to Sustainable Economic Prosperity: The Case of Greece
Appendix
Available only for authorised users
Footnotes
1
The correlation results are not presented here but are available upon request.
 
Literature
Aghion, P., Akcigit, U., Cagé, J., & Kerr, R. W. (2016). Taxation, Corruption, and Growth. European Economic Review, 86, 24–51.CrossRef
Aghion, P., & Howitt, R. (1994). Growth and Unemployment. Review of Economic Studies, 61(3), 477–494.CrossRef
Alesina, A., & Perotti, R. (1996). Income Distribution, Political Instability, and Investment. European Economic Review, 40(6), 1203–1228.CrossRef
Angelopoulos, K., Malley, J., & Philippopoulos, A. (2008). Tax Structure, Growth and Welfare in the UK (Department of Economics, University of Glasgow, W/P No 2008_05).
Asteriou, D., & Price, S. (2001). Political Instability and Economic Growth: UK Time Series Evidence. Scottish Journal of Political Economy, 48, 383–399.CrossRef
Asteriou, D., & Sarantidis, A. (2016). Political Instability and Stock Market Returns: Evidence from OECD Countries. Economics and Business Letters, 5(4), 113–124.CrossRef
Atems, B. (2015). Another Look at Tax Policy and State Economic Growth: The Long-run and Short-run of It. Economic Letters, 127, 64–67.CrossRef
Barro, R. J. (2013). Inflation and Economic Growth. Annals of Economics and Finance, 14(1), 121–144.
Bollerslev, T. (1986). Generalized Autoregressive Conditional Heteroskedasticity. Journal of Econometrics, 31, 307–327.CrossRef
De Mooij, R., & Ederveen, S. (2008). Corporate Tax Elasticities: A Reader’s Guide to Empirical Findings. Oxford Review of Economic Policy, 24(4), 680–697.CrossRef
De Mooij, R., & Keen, M. (2012). Fiscal Devaluation’ and Fiscal Consolidation: The VAT in Troubled Times (IMF Working Paper No WP/12/85). International Monetary Fund.
Devereux, M. P., & Freeman, H. (1995). The Impact of Tax on Foreign Direct Investment: Empirical Evidence and the Implications for Tax Integration Schemes. International Tax and Public Finance, 2, 85–106.CrossRef
Easterly, W., & Rebelo, S. (1993). Fiscal Policy and Economic Growth: An Empirical Investigation. Journal of Monetary Economics, 32(3), 417–458.CrossRef
Enders, W. (1995). Applied Econometric Time Series. New York: Wiley.
Engen, E. M., & Skinner, J. (1996). Taxation and Economic Growth. National Tax Journal, 49(4), 617–642.
Engen, E. M., & Skinner, J. (1999). Taxation and Economic Growth. In J. Slemrod (Ed.), Tax Policy in the Real World (pp. 305–330). New York: Cambridge University Press.CrossRef
Engle, R. F., Lilien, D. M., & Robins, R. P. (1987). Estimating Time Varying Risk Premia in the Term Structure: The ARCH-M Model. Econometrica, 55, 391–407.CrossRef
European Commission. (2015). Study to Quantify and Analyse the VAT Gap in the EU Member States. European Commission.
Hajkova, D., Nicoletti, G., Vartia, L., & Yoo, K. Y. (2006). Taxation and Business Environment as Drivers of Foreign Direct Investment in OECD Countries. OECD Economic Studies, 2006(2), 7–38.CrossRef
Head, J. G., & Krever, R. (2009). Tax Reform in the 21st Century: A Volume in Memory of Richard Musgrave (p. 7). NY: Wolters Kluwer Law & Business.
Heitger, B. (2002). The Impact of Taxation on Unemployment in OECD Countries. Cato Journal, 22(2), 333–354.
IOBE. (2015). IOBE Notes: The Elements of the Economy. Characteristics, Income and the Effects of VAT (In Greek). Athens: Foundation for Economic and Industrial Research.
Jong-a-Pin, R. (2009). On the Measurement of Political Instability and Its Impact on Economic Growth. European Journal of Political Economy, 25, 15–29.CrossRef
King, M., & Fullerton, D. (1984). The Taxation of Income from Capital: A Comparative Study of the United States, United Kingdom, Sweden, and West Germany (p. 1984). Chicago: University of Chicago Press.CrossRef
Koester, R. B., & Kormendi, C. R. (1989). Taxation, Aggregate Activity and Economic Growth: Cross Country Evidence on Some Supply-Side Hypotheses. Economic Inquiry, 27(3), 367–386.CrossRef
Lee, Y., & Gordon, H. R. (2005). Tax Structure and Economic Growth. Journal of Public Economics, 89, 1027–1043.CrossRef
Musgrave, R. A. (1957). A Multiple Theory of Budget Determination. Finanzarchiv, 17(3), 333–343.
Okun, A., & Summers, L. (2015). Equality and Efficiency: The Big Tradeoff. Brookings Institution Press.
Padovano, F., & Galli, E. (2001). Tax Rates and Economic Growth in the OECD Countries (1950–1990). Economic Inquiry, 39(1), 44–57.CrossRef
Papageorgiou, D. (2009). Macroeconomic Implications of Alternative Tax Regimes: The Case of Greece (WP Series 97). Bank of Greece.
Pitchford, J., & Turnovsky, S. J. (1976). Some Effects of Taxes on Inflation. The Quarterly Journal of Economics, 90(4), 523–539.CrossRef
Romer, C. D. & Romer, D. H. (2010). The Macroeconomic Effects of Tax Changes: Estimates Based on a New Measure of Fiscal Shocks. American Economic Review, American Economic Association, 100 (3), 763–801.
Tosun, S. M., & Abizaleh, S. (2005). Economic Growth and Tax Components: An Analysis of Tax Changes in OECD. Applied Economics, 37(19), 2251–2263.CrossRef
Tresch, R. W. (2015). Public Finance: A Normative Theory (Third ed.pp. 154–174). London: Academic Press is an imprint of Elsevier.
Vidal, R., Ma, Y., & Sastry, S. S. (2016). Generalized Principal Component Analysis. New York: Springer Verlag.CrossRef
Yang, Z. (2016). Tax Reform, Fiscal Decentralization, and Regional Economic Growth: New Evidence from China. Economic Modelling, 59, 520–528.CrossRef
Zipfel, F. (2007). One Europe, One Tax? Plans for a Common Consolidated Corporate Tax Base. Frankfurt: Deutsche Bank Research.
Metadata
Title
The Impact of Tax Policy on the Economic Growth of Greece
Authors
Grigorios Spirakis
Antonios Sarantidis
Copyright Year
2017
Book
Taxation in Crisis

Print ISBN: 978-3-319-65309-9

Electronic ISBN: 978-3-319-65310-5

Copyright Year: 2017

DOI
https://doi.org/10.1007/978-3-319-65310-5_16