Advanced empirical research based on structural equation modeling (SEM) regarding the impact of tax revenue on GDP dynamics at EU-28 level

Abstract

The main objective of this empirical study is to investigate the impact of tax revenue on GDP dynamics at EU-28 level based on structural equation modeling (SEM). We applied structural equation modeling (SEM) which represents a multivariate statistical analysis technique used especially for analyzing structural relationships between measured variables and latent structures. Selected taxes are the following: environmental taxes, indirect taxes, social contributions, taxes on capital, taxes on labour, taxes on property, and direct taxes. The sample period includes a long time horizon during 2005-2017 for each member states of EU-28. Our empirical findings revealed the level of taxation exhibits an increased influence on GDP dynamics in case of EU-28 member states. JEL Codes - C3; E62; O47; O52

Keywords

• taxation
• structural equation modeling (sem)
• economic growth
• fiscal policy
• gdp
• regression analysis