Corruption and Tax Burden: What Is the Joint Effect on Total Factor Productivity?

Kouramoudou Kéïta and Hannu Laurila
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Kouramoudou Kéïta: Faculté des Sciences Economiques et de Gestion de l’Université de Kindia, Kindia BP:212, Guinea
Hannu Laurila: Faculty of Management and Business, Tampere University, FI-33014 Kalevantie, Finland

Economies, 2021, vol. 9, issue 1, 1-16

Abstract: A common conclusion in the literature is that both corruption and taxation hamper economic growth. It is also plausible that both affect total factor productivity, which, by the famous Solow residual, is a vital driver of economic progress. Moreover, corruption and tax burden are supposed to be intertwined. This paper focuses on the supposedly linked effects of corruption and tax burden on total factor productivity. The empirical study uses panel data from 90 countries for the time span of 1996–2014. The results show that both corruption and tax burden deteriorate total factor productivity, but that an increase in tax burden mitigates the negative effect of corruption.

Keywords: corruption; Solow residual; tax burden; total factor productivity (search for similar items in EconPapers)
JEL-codes: E F I J O Q (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:gam:jecomi:v:9:y:2021:i:1:p:26-:d:508301

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