IDEAS home Printed from https://ideas.repec.org/a/eme/jhassp/jhass-08-2023-0099.html
   My bibliography  Save this article

Short-term and long-term effects of foreign direct investment on tax revenue: empirical evidence from an emerging economy

Author

Listed:
  • Abubakar Musah
  • Peter Kwasi Kodjie
  • Munkaila Abdulai

Abstract

Purpose - This paper examines the short- and long-run effects of foreign direct investment (FDI) on tax revenue in Ghana. Design/methodology/approach - The paper adopts the autoregressive distributed lag approach to estimate FDI’s long-run and short-run effects on tax revenue. The study uses time-series data from 1983 to 2019 for Ghana, mainly obtained from The Bank of Ghana, the World Bank and the IMF. Findings - The results show that, in the short-run, FDI has no significant effect on direct tax revenue and total tax revenue but significantly hurts indirect tax revenue. In the long run, however, the results show that FDI has significant positive effects on indirect tax revenue and total tax revenue but no significant effect on direct tax revenue. Originality/value - Empirical studies often fail to analyse the short-run and long-run effects of FDI on tax revenue. This study contributes to the mixed literature by analysing the short-run and long-run effects of FDI on tax revenue in an emerging market context. Additionally, this study employs three tax revenue measures in analysing the nexus.

Suggested Citation

  • Abubakar Musah & Peter Kwasi Kodjie & Munkaila Abdulai, 2024. "Short-term and long-term effects of foreign direct investment on tax revenue: empirical evidence from an emerging economy," Journal of Humanities and Applied Social Sciences, Emerald Group Publishing Limited, vol. 6(4), pages 331-344, January.
    • Handle: RePEc:eme:jhassp:jhass-08-2023-0099
    DOI: 10.1108/JHASS-08-2023-0099
    as

    Download full text from publisher

    File URL: https://www.emerald.com/insight/content/doi/10.1108/JHASS-08-2023-0099/full/html?utm_source=repec&utm_medium=feed&utm_campaign=repec
    Download Restriction: no
    File URL: https://www.emerald.com/insight/content/doi/10.1108/JHASS-08-2023-0099/full/pdf?utm_source=repec&utm_medium=feed&utm_campaign=repec
    Download Restriction: no
    File URL: https://libkey.io/10.1108/JHASS-08-2023-0099?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eme:jhassp:jhass-08-2023-0099. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Emerald Support (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.