Tax compliance, public spending and happiness in Europe

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
María Jesús Delgado-Rodríguez ◽  
Sonia De Lucas-Santos
Keyword(s):  
Factor Model ◽  
Public Spending ◽  
Tax Compliance ◽  
Well Being ◽  
Tax Revenue ◽  
Dynamic Factor ◽  
Content Type ◽  
Public Resources ◽  
Short Run ◽  
And Behavior

Purpose This study aims to analyze whether tax compliance is the basis for the short-run dynamics of the development of welfare and happiness. The strengthening of tax compliance of corporates and citizens is not only important to achieve the goals assumed by fiscal policy but also is part of the values that can generate a higher level of welfare and happiness in Europe. Design/methodology/approach This study uses a dynamic factor model to offer new indexes that allow to monitor tax compliance, public spending and happiness trajectories and to evaluate their short-run relationships. Next, an analysis of the cyclical characteristics in terms of duration, amplitude and intensity is provided using the Harding and Pagan method (2002). Findings The empirical findings show that the European countries were able to reinforce tax compliance during the expansionary periods of the economy, and this has made it possible to increase public spending, and indirectly, happiness. Otherwise, this paper shows that the contractions of public resources during the global crisis, such as the case in the COVID-19, reduced the possibilities of well-being in Europe and made it more difficult to increase public spending and happiness. Research limitations/implications This study tries to analyze the transmission channels and relationships of three very complex variables: tax compliance, public spending and happiness. Incorporating these three variables into this research, with a short-run perspective, the authors have opened a new line of research that enriched the previous analysis. Therefore, the authors’ results should be considered the first step, that this study is going to continue to unravel the complexity of these relationships. Practical implications The design of policies aimed at improving individual, corporate and the well-being of nations needs them to incorporate elements of tax compliance as an objective that has economic and social implications. Individuals and corporates contribute to a fairer and more equitable society through compliance with tax obligations. Originality/value To the best of the authors’ knowledge, this is the first paper that offers evidence on the short-run dynamics of tax revenue, public spending and happiness for a better understanding of their relationships and behavior during the different periods of the economy.

scholarly journals SOME NEW ESTIMATES OF SHADOW ECONOMY FOR 80 COUNTRIES USING POOLED MEAN GROUP ESTIMATOR

2017 ◽  
Vol 18 (1) ◽  
Author(s):  
Yan-Ling Tan ◽  
Muzafar Shah Habibullah ◽  
Shivee Ranjanee Kaliappan ◽  
Alias Radam
Keyword(s):  
Shadow Economy ◽  
Factor Model ◽  
Statistical Significance ◽  
Dynamic Factor ◽  
Pooled Mean Group ◽  
Macroeconomic Uncertainty ◽  
Long Run ◽  
Uncertainty Index ◽  
Short Run ◽  
Currency Demand

The purpose of this study is to estimates the size of the shadow economy for 80 countries from nine regions spanning the period 1975-2012 based on Tanzi-type currency demand approach (CDA). This study contributes to the literature in three distinct ways. First, we augment CDA regression with a macroeconomic uncertainty index (MUI). Second, the construction of the uncertainty index is based on the dynamic factor model (DFM). Third, the pooled mean group (PMG) estimator allows in capturing the heterogeneity across countries in the short-run dynamics but imposing restrictions in the long-run parameters. The results confirm the existence of the longrun equilibrium relationship among the variables examined. All coefficients show expected signs along with statistical significance. More importantly, the macroeconomic uncertainty index variable show positive relationship, suggesting that public tend to hold more currency in an uncertain macroeconomic environment. In addition, we observe that developing regions (ranging from 19.9% to 37.3%) exhibit relatively large size of the shadow economy. On the contrary, developed regions have a considerable smaller estimate (ranging from 13.7% to 19.0%) of the size of shadow economy. On average, the world estimate of the shadow economy as a percentage of GDP is about 23.1%. Keywords: Shadow Economy; Currency Demand; Macroeconomic Uncertainty; Pooled Mean Group.

Big Five personality traits in simulated negotiation settings

2018 ◽  
Vol 13 (2) ◽  
pp. 201-213 ◽  
Author(s):  
Pedro Fontes Falcão ◽  
Manuel Saraiva ◽  
Eduardo Santos ◽  
Miguel Pina e Cunha
Keyword(s):  
Personality Traits ◽  
Factor Model ◽  
Five Factor Model ◽  
Big Five Personality ◽  
Content Type ◽  
Situational Variables ◽  
Integrative Negotiation ◽  
Negotiation Behavior ◽  
New Findings ◽  
And Behavior

Purpose After a hiatus in the research on individual differences in negotiation, there has been a surge of renewed interest in recent years followed by several new findings. The purpose of this paper is to explore the effects that personality, as structured by the five-factor model, have over negotiation behavior and decision making in order to create new knowledge and prescribe advice to negotiators. Design/methodology/approach This study replicates observations from earlier studies but with the innovation of using a different methodology, as data from a sample of volunteer participants were collected in regard to their personality and behavior during two computerized negotiation simulations, one with the potential for joint gains and the other following a more traditional bargaining scenario. Findings Significant results for both settings were found, with the personality dimensions of agreeableness, conscientiousness, and extraversion systematically reoccurring as the most statistically relevant, although expressing different roles according to the type of negotiation and measure being registered. The findings thus suggest a multidimensional relationship between personality and situational variables in which specific traits can either become liabilities or assets depending upon whether the potential for value creation is present or not. Originality/value The new findings on the impacts of personality traits on both distributive and integrative negotiations allow negotiators to improve their performance and to adapt to specific distributive or integrative negotiation situations.

The effectiveness of government expenditure on economic growth in Botswana

2019 ◽  
Vol 10 (3) ◽  
pp. 368-384 ◽  
Author(s):  
Kafayat Amusa ◽  
Mutiu Abimbola Oyinlola
Keyword(s):  
Economic Growth ◽  
Government Spending ◽  
Negative Impact ◽  
Positive Impact ◽  
Government Expenditure ◽  
Public Spending ◽  
Empirical Literature ◽  
Content Type ◽  
Long Run ◽  
Short Run

Purpose The purpose of this paper is to examine the relationship between government expenditure and economic growth in Botswana over the period 1985‒2016. The study employed the auto-regressive distributed lag (ARDL) bounds testing approach in investigating the nexus. The study makes the argument that the effectiveness of public spending should be assessed not only against the amount of the expenditure but also by the type of the expenditure. The empirical findings showed that aggregate expenditure has a negative short-run and positive long-run effect on economic growth. When expenditure is disaggregated, both forms of expenditures have a positive short-run effect on economic growth, whereas only a long-run positive impact of recurrent expenditure is observed. The study suggests the need to prioritize scarce resources in productive recurrent and development spending that enables increased productivity. Design/methodology/approach This study examined the effectiveness of government spending in Botswana, within an ARDL framework from 1985 to 2016. To achieve this, the analysis is carried out on both an aggregate and disaggregated level. Government spending is divided into recurrent and development expenditures. Findings This study examined the effectiveness of government spending in Botswana, within an ARDL framework from 1985 to 2016. To achieve this, the analysis hinged on both the aggregate and disaggregated levels. The results of the aggregate analysis suggest that total public expenditure has a negative impact on economic growth in the short run; however, its impact becomes positive over the long run. On disaggregating government spending, the results show that both recurrent and development expenditures have a significant positive short-run impact on growth; however, in the long run, the significant positive impact is only observed for recurrent expenditure. Practical implications The results provide evidence of the diverse effects of government expenditure in the country. In the period under investigation, 73 percent of total government expenditure in Botswana was recurrent in nature, whereas 23 percent was related to development. From the results, it can be observed that although the recurrent expenditure has contributed to increased growth and must be encouraged, it is also pertinent for the Botswana Government to endeavor to place more emphasis on productive development expenditure in order to enhance short- and long-term growth. Further, there is a need to strengthen the growth-enhancing structures and to prioritize the scarce economic resources toward productive spending and ensuring continued proper governance over such expenditures. Originality/value The study provides empirical evidence on the effectiveness of government spending in a small open, resource-reliant middle-income SSA economy and argues that the effectiveness of public spending must be assessed not only against the amount of the expenditure but also on the type or composition of the expenditure. The study contributes to the scant empirical literature on Botswana by employing the ARDL approach to cointegration technique in estimating the long- and short-run impact of government expenditure on economic growth between 1985 and 2016.

Inter-dependencies among Asian bond markets

2017 ◽  
Vol 34 (4) ◽  
pp. 485-505 ◽  
Author(s):  
Sowmya Subramaniam ◽  
Krishna P. Prasanna
Keyword(s):  
Term Structure ◽  
Yield Curve ◽  
Factor Model ◽  
Dynamic Factor ◽  
Bond Markets ◽  
Content Type ◽  
Monetary Authorities ◽  
Asian Economies ◽  
Regional Factors

Purpose The purpose of the paper is to investigate the global and regional influences on the domestic term structure of nine Asian economies. Design/methodology/approach The dynamic Nelson Siegel model was used to extract the latent factors of a country’s yield curve movements in a state-space framework using the Kalman filter. The global and regional factors of the yield curve were extracted using the dynamic factor model. Further, the Bayesian inference of Gibbs sampling approach was used to identify the influence of global and regional factors on the domestic yield curve. Findings The results suggest that financial integration does not reduce the control of monetary authorities on the front end of the yield curve, and long-term interest rate is the potential transmission channel through which the contagion of the financial crisis spreads. Practical implications The results of this study would help the monetary authorities to understand the efficacy of the monetary policy transmission mechanism. It also offers the global investors diversification opportunities for investing in the Asian bond markets. Originality/value It is one of the earliest attempts to capture the global and regional yield curve movements and their impact on the emerging Asian economies yield curve. It contributes to literature by identifying the linkages in the long-term factor that is the potential channel through which crisis spreads.

Islamic stock-sukuk indexes' correlations: does financial uncertainty matter?

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Fatma Alahouel ◽  
Nadia Loukil
Keyword(s):  
Factor Model ◽  
Dynamic Factor ◽  
Investment Horizon ◽  
Market Uncertainty ◽  
Content Type ◽  
Financial Uncertainty ◽  
Flight To Quality ◽  
Diversification Benefit ◽  
Stock Indexes ◽  
The Impact

PurposeThis study examines co-movements between global Islamic index and heterogeneous rated/maturity sukuk. It tests the impact of financial uncertainty on these movements.Design/methodology/approachFirstly, we conduct a bivariate wavelet analysis to assess the co-movements between stocks and sukuk indexes. Secondly, we use General dynamic factor model and stochastic volatility to construct financial uncertainty index from Islamic stock indexes. Finally, we run regression analysis to determine the impact of uncertainty on the obtained correlations.FindingsOur results suggest the absence of flight to quality phenomenon since correlations are positive especially at a short investment horizon. There is evidence of contagion phenomena across assets. Financial uncertainty may be considered as a determinant of stock-sukuk co-movements. Our results show that a rise in financial uncertainty induces correlation to move in the opposite direction in the short term, (exception for correlation with AA-Rated sukuk). However, the sign of stock market uncertainty becomes positive in the long term, which leads sukuk and stocks to move in the same direction (exception for 1–3 Year and AA Rated sukuk).Practical implicationsInvestors may combine sukuk with 1–3 Year maturity and AA Rated when considering long holding periods. Further, all sukuk categories provide diversification benefit in time high financial uncertainty expectation for AA Rated sukuk when considering short holding periods.Originality/valueTo the best of our best knowledge, our study is the first investigation of the impact of financial uncertainty on Stock-sukuk co-movements and provides recommendation considering sukuk with different characteristics.

India will struggle to rein in fiscal deficit

2021 ◽  
Keyword(s):  
Public Health System ◽  
Well Being ◽  
Tax Revenue ◽  
Gdp Growth ◽  
Fiscal Deficit ◽  
Content Type ◽  
The Public ◽  
Glide Path ◽  
The Government ◽  
Health And Well Being

Significance The fiscal deficit is projected to be 9.5% of GDP in 2020/21 -- compared with a budgeted 3.5% -- narrowing to 6.8% in 2021/22 and 4.5% by 2025/26. The government is counting on increased tax revenue and receipts from divestment to help it stick to this fiscal ‘glide path’. Impacts Increased spending on health and well-being should at least create more jobs in the public health system. Delhi will count on a return to high levels of GDP growth to help reduce the government debt-to-GDP ratio. The government may find it difficult to realise its goal of pushing through privatisation of Air India within the first half of 2021/22.

scholarly journals An analysis of the prosperity of China's marine economy

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Li Xuemei ◽  
Benshuo Yang ◽  
Yun Cao ◽  
Liyan Zhang ◽  
Han Liu ◽  
...  
Keyword(s):  
Turning Point ◽  
Industrial Structure ◽  
Factor Model ◽  
Indicator System ◽  
Economic Benefits ◽  
Dynamic Factor ◽  
Economic Prosperity ◽  
Content Type ◽  
Marine Economy ◽  
Prosperity Index

PurposeChina's marine economy occupies an important position within the national economy, and its contribution thereto is constantly improving. The overall operation of the marine economy shows positive developmental trends with potential for further growth. The purpose of this research is to analyse the prosperity of China's marine economy, reveal trends therein and forecast the likely turning point in its operation.Design/methodology/approachBased on the periodicity and fluctuation of China's marine economy development, China's marine economic prosperity indicator system is established from five perspectives. On this basis, China's marine economic operation prosperity index can be synthesised and calculated, then a dynamic factor model is constructed. Using the filtering method to calculate China's marine economic operational Stock–Watson index, Markov switching has been used to determine the trend to transition. Furthermore, China's current marine economic prosperity is evaluated through analysis of influencing factors and correlation analysis.FindingsThe analysis shows that, from 2017 to 2019, the operation of the marine economy is relatively stable, and the prosperity index supports this finding; meanwhile it also exposes problems in China's marine economy, such as an unbalanced industrial structure, low marine economic benefits and insufficient capacity for sustainable development.Originality/valueThrough the analysis of the prosperity of China's marine economy, the authors reveal the trends in China's marine economy and forecast its likely future turning point.

scholarly journals How can tax compliance be incentivized? An experimental examination of voice and empathy

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Mariam AbdelNabi ◽  
Khedr Wanas ◽  
Sarah Mansour
Keyword(s):  
Tax Evasion ◽  
Explanatory Variable ◽  
Public Spending ◽  
Tax Compliance ◽  
Arab Countries ◽  
Social Implications ◽  
Welfare Programs ◽  
Content Type ◽  
Compliance Behavior ◽  
The Impact

PurposeTax evasion is an economic crime that nearly all world countries suffer from. Its consequences are countless, including poor public spending on infrastructure projects and social welfare programs, low economic growth and development, institutional mistrust and fiscal deficits. For developing countries in particular, targeting development programs and infrastructural investments requires an efficient tax collection policy to generate sufficient funds for such purposes. This makes the tax evasion problem a critical one and countering it extremely policy relevant. Based on evidence that shows how the understanding of taxpayers' behavior is an essential factor in fighting evasion, this paper aims to test different factors that might incentivize citizens using a behavioral and experimental approach, in non-Western educated industrialized rich democracies (non-WEIRD) countries, to comply more.Design/methodology/approachThis paper uses a survey experiment to examine the impact of different behavioral primes on tax compliance behavior. Specifically, it observes subjects' compliance behavior in two contexts: voice and empathy. A total of 273 students from a big public university in Egypt were randomly selected to participate in this study.FindingsIn the “Voice” treatment, the explanatory variable (VOICE) was found statistically significant, thus confirming the hypothesis that democracy, through having a voice in the decision-making process, affects compliance positively. As for the “Empathy” treatment, the explanatory variable (EMPATHY) was also found significant. This confirms the second hypothesis that triggering feelings of empathy, through highlighting the good cause behind public spending that uses taxpayers' money, affects compliance behavior positively.Research limitations/implicationsDespite the fact that the experimental methodology is a methodology with high internal validity, examining the impact of a specific intervention on behavior, a replication of the experiment in other contexts might be useful in increasing the external validity of the findings. Specifically, conducting this experiment on a nonstudent sample might lead to even more powerful results by increasing the ecological validity of the results.Practical implicationsThis study advocates a more behaviorally informed public policy. Specifically, Egyptian policymakers are recommended to adopt behavioral nudges as a complement to existing policies. The authors believe the findings, if confirmed by repeated experiments (lab, lab-in-the-field and rational choice theories on both student and non-student samples) in a number of Arab countries, might also help in offering cost-effective nudges for the Arab world policymakers, where culture and the political context are to a great extent similar.Social implicationsThe findings of the study have a number of social implications. Higher tax compliance will enable higher levels of public spending on a number of social targets such as education, health and welfare programs.Originality/valueWhile the study builds on recent research examining how to incentivize tax compliance, it simultaneously seeks to make three contributions. First, the study design aims to apply recent advances in behavioral sciences (impact of voice and empathy) in a policy area that has not seen much use of such interventions in the Egyptian context (i.e. tax compliance). Second, the study is policy relevant in the sense that it aims to increase the effectiveness of existing government policies by complementing them with behavioral primes. Third, there is nearly no literature found applying this topic in a non-WEIRD country such as Egypt.

Well-being perception and lovemarks formation through experiential value in the context of the eco-friendly restaurant

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Seon Hee Kim ◽  
Do Hyun Jeon ◽  
Hyeon Mo Jeon
Keyword(s):  
Structural Equation ◽  
Well Being ◽  
Equation Modeling ◽  
Content Type ◽  
Service Excellence ◽  
Behavior Intention ◽  
Confirmatory Factor ◽  
Experiential Value ◽  
And Behavior

PurposeThe purpose of this study is to provide useful data for setting up eco-friendly restaurant (EFR) marketing strategies by analyzing experiential value and well-being perception, lovemarks and behavior intention, before presenting practical proposals.Design/methodology/approachThe data used in this study were based on a sample of 300 customers at “Seasonal Dining Table” in South Korea. Data were analyzed using confirmatory factor analysis and structural equation modeling.FindingsAs a result of the study, playfulness showed the greatest influence on well-being perception, followed by service excellent, aesthetics and efficiency. In addition, well-being perception was found to have a positive effect on brand love and brand respect. Finally, the role of experiential value, well-being perception and lovemarks as the determinants factors to increase the customer's behavioral intention toward EFR was confirmed.Practical implicationsThe present research informed that effectively dealing with four constituents of experiential value (efficiency, service excellence, aesthetic and playfulness) are of utmost importance in building customers' well-being perception. In addition, customers' well-being perception and lovemarks should be improved to boost the level of behavior intention for EFR.Originality/valueThis is the first study to examine experiential value, well-being perception, lovemarks and behavior intention in the context of restaurants. In particular, it is differentiated from previous foodservice studies by examining the relationship between experiential value and well-being perception.

Psychometric evaluation of need-based quality of work life scale in an Indian sample

2018 ◽  
Vol 50 (1) ◽  
pp. 10-19 ◽  
Author(s):  
Mansi Rastogi ◽  
Santosh Rangnekar ◽  
Renu Rastogi
Keyword(s):  
Organizational Behavior ◽  
Factor Model ◽  
Psychometric Evaluation ◽  
Well Being ◽  
Work Life ◽  
Quality Of Work Life ◽  
Content Type ◽  
Quality Of Work ◽  
Indian Context

Purpose The purpose of this paper is to examine the psychometric properties of the need-based measure of quality of work life (QWL) in the Indian context. Design/methodology/approach The need-based QWL instrument was validated using the 380 samples collected from public and private sector employees working in India. The data were obtained via self-administered structured questionnaires. The data were examined conducting exploratory and confirmatory factor analyses with the help of SPSS AMOS (version 21). Findings The two-factor model confirmed the superiority over the seven-factor model in the Indian context. The results are strongly supported by the extant literature in organizational behavior domain. Originality/value Despite being the second highest populated country and one of the largest skill labor facilitator to the work economy, India lags behind in well-being-related studies as compared to its Western and Asian counterparts. This study has validated and simplified the complex need-based QWL measure in the Indian context. This is easily understandable that QWL instrument is believed to encourage the well-being research in India.

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