Effect of Tax Revenues on Economic Growth in Benin: The Role of Investment

  • Gbêtondji Melaine Armel NONVIDE University of Abomey-Calavi, Benin
  • Cocou Jaures AMEGNAGLO University of Abomey-Calavi, Benin

Abstract

Benin's economy relies mainly on tax revenues. This paper analyses the role of investment in the relation between tax revenue and economic growth in Benin. It employed the Fully Modified Ordinary Least Squares technique to estimate the long run relationship among the variables of the model. Results indicate positive effect of tax revenues on economic growth. This effect is improved by the private investment while deteriorated by public investments which level remains low. This result emphasizes the problem of public resources allocation in Benin. Other determinants of economic growth include investment, annual population growth rate, and trade. The study recommends that fiscal policy must promote private investments. Tax revenues must be directed to more productive investments. The results also favour trade open policy.

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Published
2018-02-25
How to Cite
NONVIDE, Gbêtondji Melaine Armel; AMEGNAGLO, Cocou Jaures. Effect of Tax Revenues on Economic Growth in Benin: The Role of Investment. Journal of Advanced Studies in Finance, [S.l.], v. 8, n. 2, p. 139-145, feb. 2018. ISSN 2068-8393. Available at: <https://journals.aserspublishing.eu/jasf/article/view/1783>. Date accessed: 16 aug. 2022. doi: https://doi.org/10.14505//jasf.v8.2(16).03.
Section
Journal of Advanced Studies in Finance