Taxes, Expenditure and Development Nexus: A Panel VECM Analysis on Romanian NUTS2 Regions

Authors

  • Marius Surugiu Institute of National Economy, Romanian Academy, Bucharest, Romania
  • Camelia Surugiu Faculty of Administration and Business, University of Bucharest, Romania; National Institute for Research and Development in Tourism, Bucharest, Romania
  • Raluca Mazilescu Institute of National Economy, Romanian Academy, Bucharest, Romania
  • Anca Cristea Institute of National Economy, Romanian Academy, Bucharest, Romania

DOI:

https://doi.org/10.14207/ejsd.2021.v10n1p599

Keywords:

taxes, expenditure, socio-economic development, unit root test, cointegration, VECM, Granger causality, Romania, NUTS2 regions

Abstract

The investigation starts with the computation of the Socio-Economic Development Index (SEDI index) with data for Romania. Based on the index values, the long-run relationship between taxes and expenditure is assessed, for Romanian NUTS2 regions from 2000 to 2016. According to the results, there is a Granger causality relationship from budget revenue and expenditure to SEDI. The results emphasize the significant impact of taxes and expenditure on socio-economic development. The paper underlines the need for effective public strategies to be implemented by the authorities at the regional level, which may propel the socio-economic development. The results support the fiscal synchronization hypothesis.

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Published

2021-02-01

How to Cite

Surugiu, M. ., Surugiu, C. ., Mazilescu, R. ., & Cristea, A. . (2021). Taxes, Expenditure and Development Nexus: A Panel VECM Analysis on Romanian NUTS2 Regions. European Journal of Sustainable Development, 10(1), 599. https://doi.org/10.14207/ejsd.2021.v10n1p599

Issue

Vol. 10 No. 1 (2021)

Section

Articles

License

Creative Commons License

This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.