Do remittances increase tax revenues in developing countries? Evidence from the threshold regression models

Chrysost Bangaké, Désire Avom, Hermann Ndoya and Prince Adouma

Applied Economics, 2025, vol. 57, issue 38, 5975-5991

Abstract: This paper provides original econometric evidence on the effect of remittances on tax revenues in developing countries. In applying the system generalized methods of moments (SGMM) and the panel threshold regression method to a sample of 83 developing countries over the period 1990–2019, we find two major results. First, remittances positively and significantly affect tax revenues in developing countries. Second, as far as the nonlinear relationship is concerned, we find two extreme regimes with a smooth shift characterizing the remittances-tax revenue nexus, with respect to conditional variables; remittance effects are positive and significant under the first regime and negative and significant under the second. Furthermore, our findings show that the nonlinear relationship between remittances and tax revenues depends on the levels of informal economy, corruption, and growth volatility.

Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
http://hdl.handle.net/10.1080/00036846.2024.2374458 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:taf:applec:v:57:y:2025:i:38:p:5975-5991

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/RAEC20

DOI: 10.1080/00036846.2024.2374458

Access Statistics for this article

Applied Economics is currently edited by Anita Phillips

More articles in Applied Economics from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().