Impact of export upgrading on tax revenue in developing and high-income countries

Sèna Kimm Gnangnon and Jean Brun ()

Oxford Development Studies, 2017, vol. 45, issue 4, 542-561

Abstract: Empirical studies usually analyse the relationship between an economy’s trade sector and tax revenue in developing countries through the effect of trade liberalization on tax revenue. This paper takes a different angle by examining the impact of export upgrading strategies (export diversification and improvement in export quality) on non-resource tax revenue. The panel data-set covers a sample of 172 countries, including both developed and developing countries, spanning the period 1980–2010. The analysis is conducted both on the entire sample and sub-samples. The findings indicate that export product upgrading exerts a positive and significant effect on non-resource tax revenue, including for the sub-samples considered, with the exception of low-income countries for which we observe mixed results. Moreover, countries which upgrade their export products in a context of trade openness consistently experience higher non-resource tax revenue, both in the short and long term.

Date: 2017
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Working Paper: Impact of export upgrading on tax revenue in developing and high-income countries (2016)
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DOI: 10.1080/13600818.2017.1313398

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