2016. Volume 21, nº 2
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- The determinants of value added tax revenues in the European UnionPublication . Sarmento, JoaquimIn this paper we assess the critical factors of Value Added Tax revenues in the European Union, by using a panel data of the 27 countries, between 1998 and 2011. Our findings show that EU governments have been using tax rates increases to collect more revenues, both at the normal and the minimum rate. It was also found that an increase in the implicit rate increases revenues as well. Tax administration efficiency and experience is a critical factor for the capacity to collect VAT revenues. A better legal and institutional environment is shown to be related with higher revenues. Finally, countries in the Eurozone are shown to have higher revenues, mainly due to the fiscal rules that they are subject to. Higher income, as measured by GDP per capita, increases revenues, on account of the higher propensity for consumption.
- What drives foreign direct investment in the tradable sector?Publication . Mateus, Márcio; Proença, Isabel; Júlio, PauloResearchers usually investigate the determinants of aggregated Foreign Direct Investment (FDI), although there is evidence that the sectoral distribution of FDI matters and that too much FDI in the non-tradable sector can exacerbate external imbalances. This paper differs from most existing studies on FDI determinants by focusing on tradable sector FDI. We show that countries with a large market size, a higher degree of economic openness, a higher productivity level and good institutions are more likely to receive FDI in the tradable sector. We also show that physical distance does not represent so large an obstacle for tradable sector FDI, as it seems to represent for aggregated FDI. In contrast, based on results of empirical studies on aggregated FDI which share a common border, it does not seem to have an impact on the attraction of FDI for the tradable sector. This paper uses a modified gravity model to compare different methods, specifications and variables, in order to obtain robust results.