Does More Globalization Mean More Tax Revenue?: Long-run Evidence From Turkey

Year 2021, Volume: 10 Issue: 20, 28 - 34, 31.12.2021

Mustafa Ünver Jülide Yalçınkaya Koyuncu

Abstract

In this study, we investigate the long-run relationship between globalization and tax revenue in Turkey by using ARDL method and annual dataset spanning from 1972 to 2018. Our hypothesis claim that higher degree of globalization leads to collection of more tax revenue in Turkey in the long run. ARDL boundary test results disclose that globalization and tax revenue are co-integrated and thus they move together in the long run. Moreover, estimation results of long-run coefficients imply that there is a statistically significant positive relationship between globalization and tax revenue in Turkey in the long-run. In other words, higher degree of globalization means collection of more tax revenue in Turkey.

Keywords

Globalization, Tax Revenues, ARDL Method, Turkey

References

• Asongu, S. (2014), "Globalization (fighting), corruption and development: How are these phenomena linearly and nonlinearly related in wealth effects?", Journal of Economic Studies, 41(3), 346-369.
• Badinger, H., & Nindl, E. (2014). Globalization and corruption, revisited. The World Economy, 37(10), 1424-1440.
• Bergh, A., & Nilsson, T. (2014). Is globalization reducing absolute poverty?, World Development, 62, 42-61.
• Bretschger, L., & Hettich, F. (2005). Globalization and international tax competition: Empirical evidence based on effective tax rates. Journal of Economic integration, 530-542.
• Das, J., & DiRienzo, C. (2009). The nonlinear impact of globalization on corruption. The International Journal of Business and Finance Research, 3(2), 33-46.
• Dreher, A. (2006). The influence of globalization on taxes and social policy: An empirical analysis for OECD countries. European Journal of Political Economy, 22(1), 179-201.
• Figini, P., & Santarelli, E. (2006). Openness, economic reforms, and poverty: Globalization in developing countries. The Journal of Developing Areas, 39(2), 129-151.
• Hellier, J. (2021). Globalization, Income Tax and the Redistribution–Progressivity Tradeoff. Comparative Economic Studies, 1-27.
• İnneci, A., & Karabulut, Ş. (2018). Küreselleşme Sürecinde Türkiye'de Vergi Politikaları ve Vergi Gelirlerinin Bileşimindeki Değişim. Çankırı Karatekin Üniversitesi İktisadi ve İdari Bilimler Fakültesi Dergisi, 8(2), 271-291.
• Khalatur, S., Trokhymets, O., & Karamushka, O. (2020). Conceptual basis of tax policy formation in the globalization conditions. Baltic Journal of Economic Studies, 6(2), 81-92.
• Khan, F. N., & Majeed, M. T. (2018). Globalization and Poverty Nexus: A Panel Data Analysis. Forman Journal of Economic Studies, 14, 143-174.
• Koyuncu, C. & Unver, M. (2018). Is There a Long-run Association between Globalization and Labor Productivity?: Panel Evidence from OECD Countries. Social Sciences Research Journal, 7(3), 32-41.
• Koyuncu, J. Y., & Unver, M. (2017). The association between corruption and globalization in African countries. Social Sciences Research Journal, 6(4), 20-28.
• Kutan, A. M., & Yigit, T. M. (2009). European integration, productivity growth and real convergence: Evidence from the new member states. Economic Systems, 33(2), 127-137.
• Lalountas, D. A., Manolas, G. A., & Vavouras, I. S. (2011). Corruption, globalization and development: How are these three phenomena related?, Journal of Policy Modeling, 33(4), 636-648.
• Luković, S. (2015). The impact of globalization on the characteristics of European countries’ tax systems. Economic Annals, 60(206), 117-139.
• Majeed, M. T. (2012). Poverty consequences of globalization in OIC countries: a comparative analysis. The Pakistan Development Review, 51(4), 479-492.
• Mcmillan, M., Rodrik, D., & Verduzco-Gallo, Í. I. (2014). Globalization, Structural Change, and Productivity Growth, with an Update on Africa. World Development, 63, 11-32.
• Okşak, Y. (2018). Is there a long-run association between globalization and productivity?: The case of Turkey. Turkish Economic Review, 5(2), 215-222.
• Onaran, O., Boesch, V., & Leibrecht, M. (2012). How does globalization affect the implicit tax rates on labor income, capital income, and consumption in the European Union?. Economic Inquiry, 50(4), 880-904.
• Overesch, M., & Rincke, J. (2011). What drives corporate tax rates down? A reassessment of globalization, tax competition, and dynamic adjustment to shocks. The Scandinavian Journal of Economics, 113(3), 579-602.
• Özen, E. (2021), Productivity, Globalization and Rents in Developing Economies. Studies on Balkan and Near Eastern Social Sciences: Volume 5, Rasim Yilmaz / Günther Löschnigg (eds.), s.37-47, Peterlang.
• Özen, E. & Koyuncu, J. Y. (2020), Does Globalization Deteriorate or Alleviate Poverty?: Panel Analysis, Studies on Balkan and Near Eastern Social Sciences: Volume 4, Rasim Yilmaz / Günther Löschnigg (eds.), s.21-32, Peterlang.
• Salahuddin, M., Vink, N., Ralph, N., & Gow, J. (2020). Globalisation, poverty and corruption: Retarding progress in South Africa. Development Southern Africa, 37(4), 617-643.