Tax Revenue and Government Expenditure in Sri Lanka: An Econometric AEG Testing Approach

• Autorzy: A.L. Mohamed Aslam
• Języki publikacji: EN

Abstrakty

EN

In the global economic administration, tax revenue has been identified as the engine of the government expenditure, but the relationship of them was not investigated econometrically, this situation formulated a research gap for tasting the relationship of them. The aim of this study was to examine the Cointegration relationship among the tax revenue and the government expenditure in Sri Lanka. This study considered two time series variables such as the tax revenue and the government expenditure. The tax revenue was considered as the independent variable and the government expenditure was considered as the dependent variable. The sample period of this study was from 1950 to 2013.The Cointegration technique was used to check the long run relationship and the Error Correction Mechanism was employed to investigate the short run behavior of the tax revenue on the government expenditure. According to the empirical results, the R-squared of the estimated model was 0.99. In the meantime, the Durbin Watson statistics was 0.828. However, this model did not suffer from the spurious problem because the residual of this model was stationary. The tax revenue has sustained positive relationship with government expenditure. And also, the partial coefficients of tax revenue and its probability values in the estimated model were 0.695 (0.000) in short run and 1.031 (0.000) in long run periods. Therefore, the tax revenue and government expenditure had cointegrated at level form I(0) and maintained the long and short run relationship between them. (original abstract)

Słowa kluczowe

PL

Polityka fiskalna; Podatki; Rozwój gospodarczy; Deficyt budżetowy

EN

Fiscal policy; Taxes; Economic development; Budget deficit

• Czasopismo: International Letters of Social and Humanistic Sciences (ILSHS)
• Rocznik: 2016
• Tom: 66
• Strony: 31-37

Twórcy

autor

A.L. Mohamed Aslam

• Ministry of National Policy Planning, Sri Lanka

Bibliografia

• HL. Ahuja, Macroeconomic: theory and application. S. Chand & Company Ltd, New Delhi, India, (2002).
• KHA. Al - Quadir, The relationship between government expenditure and revenue in the Kingdom of Saudi Arabia: Testing for Co - integration and causality. JKAU: Econ &Adm, 191(1) (2005) 31 - 43.
• R. Ali, M. Shah, The causal relationship between government expenditure and revenue in Pakistan. Interdisciplinary Journal of Contemporary research in Business. 3(12) (2012) 323 - 329.
• RCH. Craigwell , H. Leon, C. Mascoll, Government revenue and expenditure causality in the presence of seasonality in Barados, Social and Economic studies. 43(4) (1994) 197 - 218.
• Y. Elyasi, M. Rahimi, The causality between government revenue and government expenditure in Iran, International Journal of Economic Sciences and Applied Research, 5(1) (2012) 129 - 145.
• ML.Jingan, Public Finance & International Trade. Varinda Publication (P) Ltd, New Delhi, India, (2004).
• DM. Mitani, GS. Khoon, Causality between government expenditure and revenue in Malaysia: A seasonal cointegration test. ASEAN economic Bulletin. 16(1) (1999) 68 -79.
• D.Moalusi, Causal link between government spending and revenue: A case study of Botswana, Fordham Economic Discussion Paper Series, Number. (2004) 2007 - 07.
• A.L. Mohamed Aslam, A case study of Cointegration relationship between Tax Revenue and Foreign Direct Investment: Evidence from Sri Lanka, 2nd International Symposium, Faculty of Faculty of Islamic Studies and Arabic Language, South Eastern University of Sri Lanka. (2015) 241 -251.
• O. Owoye, The causal relationship between taxes and expenditures in the G7 countries: cointegration and error - correction models, Applied Economic Letters, 2 (1995).
• KP Saeed, S. Somaye, Relationship between government spending and revenue: Evidence from oil exporting countries. International Journal of Economics and Management Engineering. 2(2) (2012) 33 -35.

Identyfikatory

DOI

https://doi.org/10.18052/www.scipress.com/ILSHS.66.31