Government Spending Efficiency on Economic Growth: Roles of Value-added Tax. Issue 2 (3rd April 2017)

• Record Type: Journal Article
• Authors: Chan, Sok-Gee; Ramly, Zulkufly; Karim, Mohd Zaini Abd
• Is Part Of: Global economic review. Volume 46:Issue 2(2017)
• Page Start: 162
• Page End: 188
• Publication Date: 2017-04-03
• Subjects: Government spending efficiency -- value-added tax (VAT) -- economic growth -- country governance -- data envelopment analysis; E62 -- H21; International economic relations -- Periodicals; Economic history -- 1990- -- Periodicals; East and West -- Periodicals; 337.05
• DOI: 10.1080/1226508X.2017.1292857
• Languages: English
• ISSNs: 1226-508X

Abstract

Abstract: This study examines the impact of government spending efficiency on the economic growth of 115 countries with value-added tax (VAT) system. We seek to examine the moderating role of the VAT system on the relationship between public spending efficiency and the economic growth. Using Generalized Method of Moments estimation based on two-step estimate, we found (1) government spending efficiency promotes economic growth, (2) the VAT system is found to enhance the effect of an efficient government spending on the economic growth and (3) the moderating role of the VAT system is further enhanced by quality of democracy and legislative strength of the government.