Pub Date : 2022-06-28DOI: 10.17979/ejge.2022.11.1.8198
R. Bashir, A. Danlami
This study was carried out to empirically assess women entrepreneurs’ access to credit in Kano metropolis. The study was aimed at analyzing the maximum willingness to accept loans by women entrepreneurs and exploring the major problems hindering women entrepreneurs from fundraising for businesses in Kano Metropolis. The study employed a multi-stage random sampling to select a total of three hundred and seventy-six (376) women entrepreneurs as the sample of the study. The analysis of the data was carried out using frequency count and simple percentages to analyze the demographic characteristics of the respondents. Furthermore, the inferential statistics were done using logit models to capture the specific objectives of the study. The findings of the study revealed that high interest and collateral requirement prevent women entrepreneurs from accessing a loan from financial institutions, while religious affiliation is a major factor affecting women entrepreneurs' access to credit facilities. Based on the findings of the study, the study recommends that financial institutions should introduce and operate an Islamic finance system to encourage women entrepreneurs to go for a loan as the interest rate is one of the most important constraints to women entrepreneurs seeking financial credits. Additionally, collateral demand attached to a loan for women should be removed to encourage women entrepreneurs to raise capital.
{"title":"Gender accessibility to credit among entrepreneurs","authors":"R. Bashir, A. Danlami","doi":"10.17979/ejge.2022.11.1.8198","DOIUrl":"https://doi.org/10.17979/ejge.2022.11.1.8198","url":null,"abstract":"This study was carried out to empirically assess women entrepreneurs’ access to credit in Kano metropolis. The study was aimed at analyzing the maximum willingness to accept loans by women entrepreneurs and exploring the major problems hindering women entrepreneurs from fundraising for businesses in Kano Metropolis. The study employed a multi-stage random sampling to select a total of three hundred and seventy-six (376) women entrepreneurs as the sample of the study. The analysis of the data was carried out using frequency count and simple percentages to analyze the demographic characteristics of the respondents. Furthermore, the inferential statistics were done using logit models to capture the specific objectives of the study. The findings of the study revealed that high interest and collateral requirement prevent women entrepreneurs from accessing a loan from financial institutions, while religious affiliation is a major factor affecting women entrepreneurs' access to credit facilities. Based on the findings of the study, the study recommends that financial institutions should introduce and operate an Islamic finance system to encourage women entrepreneurs to go for a loan as the interest rate is one of the most important constraints to women entrepreneurs seeking financial credits. Additionally, collateral demand attached to a loan for women should be removed to encourage women entrepreneurs to raise capital.","PeriodicalId":37945,"journal":{"name":"European Journal of Government and Economics","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2022-06-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"42013795","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-06-28DOI: 10.17979/ejge.2022.11.1.8767
Renato Correia-Domingues, Pablo Durán-Santomil, L. Otero-González
We studied the relationship between the mutual fund’s expenses and their profitability, as well as their ability to predict future performance. We used regressions in panel data with a sample of equity mutual funds of the eurozone area from 2003 to 2014. We concluded that expenses are an important determinant of performance in the eurozone and we show evidence that there is, in the short-term, a negative relationship between the profitability of the year and the level of expenses of the fund. Furthermore, there is also a relationship between the profitability of mutual funds with their level of expenses after one and three years. On the other hand, by applying the quantile regression, it seems clear that the funds with the highest returns have a positive relationship with the level of expenses.
{"title":"The explanatory power of expenses in the performance of eurozone mutual funds","authors":"Renato Correia-Domingues, Pablo Durán-Santomil, L. Otero-González","doi":"10.17979/ejge.2022.11.1.8767","DOIUrl":"https://doi.org/10.17979/ejge.2022.11.1.8767","url":null,"abstract":"We studied the relationship between the mutual fund’s expenses and their profitability, as well as their ability to predict future performance. We used regressions in panel data with a sample of equity mutual funds of the eurozone area from 2003 to 2014. We concluded that expenses are an important determinant of performance in the eurozone and we show evidence that there is, in the short-term, a negative relationship between the profitability of the year and the level of expenses of the fund. Furthermore, there is also a relationship between the profitability of mutual funds with their level of expenses after one and three years. On the other hand, by applying the quantile regression, it seems clear that the funds with the highest returns have a positive relationship with the level of expenses.","PeriodicalId":37945,"journal":{"name":"European Journal of Government and Economics","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2022-06-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"44178766","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-06-28DOI: 10.17979/ejge.2022.11.1.9147
J. Sánchez-Santos, G. Benedetto
In this editorial statement, we present a balance of the first decade of life of the European Journal of Government and Economics. We discuss the main difficulties an independent journal faces in maintaining the policy of open access and publication free of charge. We also renew the commitment to the journal's spirit, particularly with the editorial rigour and best practices. Finally, we identify the next steps in the consolidation of EJGE as an academic journal that attempts to keep an integrated approach between the fields of political science and economics.
{"title":"Editorial Statement: Ten years of life of EJGE","authors":"J. Sánchez-Santos, G. Benedetto","doi":"10.17979/ejge.2022.11.1.9147","DOIUrl":"https://doi.org/10.17979/ejge.2022.11.1.9147","url":null,"abstract":"In this editorial statement, we present a balance of the first decade of life of the European Journal of Government and Economics. We discuss the main difficulties an independent journal faces in maintaining the policy of open access and publication free of charge. We also renew the commitment to the journal's spirit, particularly with the editorial rigour and best practices. Finally, we identify the next steps in the consolidation of EJGE as an academic journal that attempts to keep an integrated approach between the fields of political science and economics.","PeriodicalId":37945,"journal":{"name":"European Journal of Government and Economics","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2022-06-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"43816302","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-06-28DOI: 10.17979/ejge.2022.11.1.8978
J. Núñez-Sánchez, Ramón Gómez-Chacón, Carmen Jambrino-Maldonado, J. García-Fernández
The COVID-19 pandemic and the increase of working-from-home have drastically changed many aspects of work life, causing very negative effects on employees' physical and psycho-social well-being. Healthy organisations have healthy employees, who have at least five psycho-social strengths of engagement, self-efficacy, resilience, optimism and hope, which are reinforced by physical activity, relating to each other in a positive way and leading to numerous benefits for the company. These strengths are being weakened by the pandemic, and the aim of this empirical study is to analyse through a case study the effects of an updated corporate wellness programme in times of pandemic on these strengths of the healthy employee. The sample was of 251 employees, 91 women and 160 men. The instruments used were the International Physical Activity Questionnaire and the adaptation of the Healthy and Resilient Organization questionnaire. The results indicated that workers with high physical activity, higher seniority, well guided by supervisors, as well as a comprehensive (multi-component) well-being programme, not only physical but also psycho-social, and with the use of different digital tools (an App is not enough), can mitigate these negative effects. Whereas companies are grappling with reduced employee engagement among other harmful psychosocial and physical effects, this case study suggests that a good corporate well-being programme could help mitigate these detrimental consequences for their workforce and be helpful for the company to adapt to this rapidly changing workplace. This study considers the impact of immigration and ethnic diversity on government spending in 31 OECD countries over 25 years and compares the marginal effects for expenditures and revenues to approximate the fiscal burden. Results suggest that ethnic fractionalization, not immigration itself, has a negative impact on spending in the OECD. On the whole, immigrants tend to contribute more in taxes than they cause in expenditures, at least relative to the averages for the population as a whole, but this effect is reversed for immigrants from poorer countries.
{"title":"Can a corporate well-being programme maintain the strengths of the healthy employee in times of COVID-19 and extensive remote working? An empirical case study.","authors":"J. Núñez-Sánchez, Ramón Gómez-Chacón, Carmen Jambrino-Maldonado, J. García-Fernández","doi":"10.17979/ejge.2022.11.1.8978","DOIUrl":"https://doi.org/10.17979/ejge.2022.11.1.8978","url":null,"abstract":"The COVID-19 pandemic and the increase of working-from-home have drastically changed many aspects of work life, causing very negative effects on employees' physical and psycho-social well-being. Healthy organisations have healthy employees, who have at least five psycho-social strengths of engagement, self-efficacy, resilience, optimism and hope, which are reinforced by physical activity, relating to each other in a positive way and leading to numerous benefits for the company. These strengths are being weakened by the pandemic, and the aim of this empirical study is to analyse through a case study the effects of an updated corporate wellness programme in times of pandemic on these strengths of the healthy employee. The sample was of 251 employees, 91 women and 160 men. The instruments used were the International Physical Activity Questionnaire and the adaptation of the Healthy and Resilient Organization questionnaire. The results indicated that workers with high physical activity, higher seniority, well guided by supervisors, as well as a comprehensive (multi-component) well-being programme, not only physical but also psycho-social, and with the use of different digital tools (an App is not enough), can mitigate these negative effects. Whereas companies are grappling with reduced employee engagement among other harmful psychosocial and physical effects, this case study suggests that a good corporate well-being programme could help mitigate these detrimental consequences for their workforce and be helpful for the company to adapt to this rapidly changing workplace. This study considers the impact of immigration and ethnic diversity on government spending in 31 OECD countries over 25 years and compares the marginal effects for expenditures and revenues to approximate the fiscal burden. Results suggest that ethnic fractionalization, not immigration itself, has a negative impact on spending in the OECD. On the whole, immigrants tend to contribute more in taxes than they cause in expenditures, at least relative to the averages for the population as a whole, but this effect is reversed for immigrants from poorer countries.","PeriodicalId":37945,"journal":{"name":"European Journal of Government and Economics","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2022-06-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"44125606","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-06-28DOI: 10.17979/ejge.2022.11.1.7564
N. Najm, A. A. B. Alnidawy, A. Yousif
This study seeks to determine the impact of corporate governance dimensions (compliance with the corporate governance code, top management, control environment, transparency and disclosure, rights of shareholders and stakeholders) on the three main types of organizational commitment, (affective, continuance and normative). It also aims at examining the impact of organizational culture, as an intermediate variable, on the relationship between the two above mentioned variables. The sample of this study comprised 152 respondents working at five types of Jordanian companies. The results of the study have confirmed the positive effect of the three corporate governance dimensions (compliance with the corporate governance code, top management, and control environment) on three types of organizational commitment (affective, continuance, and normative). The results also confirmed that there is no significant effect of t transparency and disclosure and the rights of shareholders and stakeholders on affective and normative commitment.
{"title":"Corporate governance and organizational commitment: the mediating role of organizational culture","authors":"N. Najm, A. A. B. Alnidawy, A. Yousif","doi":"10.17979/ejge.2022.11.1.7564","DOIUrl":"https://doi.org/10.17979/ejge.2022.11.1.7564","url":null,"abstract":"This study seeks to determine the impact of corporate governance dimensions (compliance with the corporate governance code, top management, control environment, transparency and disclosure, rights of shareholders and stakeholders) on the three main types of organizational commitment, (affective, continuance and normative). It also aims at examining the impact of organizational culture, as an intermediate variable, on the relationship between the two above mentioned variables. The sample of this study comprised 152 respondents working at five types of Jordanian companies. The results of the study have confirmed the positive effect of the three corporate governance dimensions (compliance with the corporate governance code, top management, and control environment) on three types of organizational commitment (affective, continuance, and normative). The results also confirmed that there is no significant effect of t transparency and disclosure and the rights of shareholders and stakeholders on affective and normative commitment.","PeriodicalId":37945,"journal":{"name":"European Journal of Government and Economics","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2022-06-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"44522394","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-06-28DOI: 10.17979/ejge.2022.11.1.8601
Federico Guerrero, Elliott Parker
This study considers the impact of immigration and ethnic diversity on government spending in 31 OECD countries over 25 years and compares the marginal effects for expenditures and revenues to approximate the fiscal burden. Results suggest that ethnic fractionalization, not immigration itself, has a negative impact on spending in the OECD. On the whole, immigrants tend to contribute more in taxes than they cause in expenditures, at least relative to the averages for the population as a whole, but this effect is reversed for immigrants from poorer countries.
{"title":"Immigration, ethnic fractionalization, and the fiscal burden in the OECD","authors":"Federico Guerrero, Elliott Parker","doi":"10.17979/ejge.2022.11.1.8601","DOIUrl":"https://doi.org/10.17979/ejge.2022.11.1.8601","url":null,"abstract":"This study considers the impact of immigration and ethnic diversity on government spending in 31 OECD countries over 25 years and compares the marginal effects for expenditures and revenues to approximate the fiscal burden. Results suggest that ethnic fractionalization, not immigration itself, has a negative impact on spending in the OECD. On the whole, immigrants tend to contribute more in taxes than they cause in expenditures, at least relative to the averages for the population as a whole, but this effect is reversed for immigrants from poorer countries.","PeriodicalId":37945,"journal":{"name":"European Journal of Government and Economics","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2022-06-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"46465230","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2021-12-01DOI: 10.17979/ejge.2021.10.2.7366
H. Kuncoro
TThe use of large fiscal stimulus packages to dampen the impact of Covid-19 recently has raised concerns about the effectiveness of the discretionary fiscal policy. This paper aims at analysing the feasibility of automatic fiscal stabilisers to mitigate economic fluctuations in the case of Indonesia. Using the IMF standard model for quarterly data over the period of 2001(1) to 2019(4), we find that the role of automatic fiscal stabilisers is getting greater both in revenue and spending. This implies that the automatic fiscal stabilisers are feasible as the main fiscal policy instrument for economic stability goals in the future. However, given the existing circumstances, Indonesia has to reform economic, regulatory, and institutional ecosystems in adopting the automatic fiscal stabilisers.
{"title":"The role of automatic stabilizers in business cycle: the case of indonesia","authors":"H. Kuncoro","doi":"10.17979/ejge.2021.10.2.7366","DOIUrl":"https://doi.org/10.17979/ejge.2021.10.2.7366","url":null,"abstract":"TThe use of large fiscal stimulus packages to dampen the impact of Covid-19 recently has raised concerns about the effectiveness of the discretionary fiscal policy. This paper aims at analysing the feasibility of automatic fiscal stabilisers to mitigate economic fluctuations in the case of Indonesia. Using the IMF standard model for quarterly data over the period of 2001(1) to 2019(4), we find that the role of automatic fiscal stabilisers is getting greater both in revenue and spending. This implies that the automatic fiscal stabilisers are feasible as the main fiscal policy instrument for economic stability goals in the future. However, given the existing circumstances, Indonesia has to reform economic, regulatory, and institutional ecosystems in adopting the automatic fiscal stabilisers.","PeriodicalId":37945,"journal":{"name":"European Journal of Government and Economics","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2021-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"42264176","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2021-12-01DOI: 10.17979/ejge.2021.10.2.7831
Woo-ik Yu
This paper analyzes the effect of the so-called ‘brain drain’ on economic growth through the channel of growth in total factor productivity. We analyze panel data that measure the severity of brain drain, which are from IMD and the U.S. National Science Foundation. Our analysis shows that middle-income countries have more brain drain compared to the group of high-income countries. Also, emerging economies that grow fast tend to experience more brain drain. Our results from fixed effects regression models show that that brain drain has a significant and positive impact on economic growth, and the main channel is productivity growth. This can be considered as evidence of the positive effects of ‘brain circulation’, which is one of the brain drain phenomena that settlement of the talents in advanced countries can eventually help improve the productivity of home country by the sharing of advanced technologies and skills around them with colleagues in motherland. Therefore, a strategy of utilizing overseas resident talents should also be considered, alongside the brain-attraction policy.
{"title":"Brain drain and economic growth: evidence of productivity growth from brain circulation","authors":"Woo-ik Yu","doi":"10.17979/ejge.2021.10.2.7831","DOIUrl":"https://doi.org/10.17979/ejge.2021.10.2.7831","url":null,"abstract":"This paper analyzes the effect of the so-called ‘brain drain’ on economic growth through the channel of growth in total factor productivity. We analyze panel data that measure the severity of brain drain, which are from IMD and the U.S. National Science Foundation. Our analysis shows that middle-income countries have more brain drain compared to the group of high-income countries. Also, emerging economies that grow fast tend to experience more brain drain. Our results from fixed effects regression models show that that brain drain has a significant and positive impact on economic growth, and the main channel is productivity growth. This can be considered as evidence of the positive effects of ‘brain circulation’, which is one of the brain drain phenomena that settlement of the talents in advanced countries can eventually help improve the productivity of home country by the sharing of advanced technologies and skills around them with colleagues in motherland. Therefore, a strategy of utilizing overseas resident talents should also be considered, alongside the brain-attraction policy.","PeriodicalId":37945,"journal":{"name":"European Journal of Government and Economics","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2021-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"42012210","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2021-12-01DOI: 10.17979/ejge.2021.10.2.7907
A. Bodea
The present paper is concerned with the prospect of euro adoption in Romania. The study starts from the relevant literature of the Optimum Currency Areas and identifies the most widely acknowledged meta property and methodological model for this purpose: the SVAR Blanchard and Quah decomposition for identifying the supply and demand shocks. Employing the indicated model and the most recent data, we are able extract and analyse the underlying shocks that hit 34 European economic entities in the period 1995-2019, while also taking into account two crucial structural changes for the Romanian economy – central bank independence and EU accession. After performing the pairwise correlations between Romania and the rest of the economic entities for both the supply and demand disturbances, we map them on a bidimensional graph. We discover that while there is relevant integration and connectedness that ensures relatively high correlations between supply shocks, the politically-motivated monetary and fiscal policy disturbances that created ample and hectic demand side movements, are a factor of great concern for the prospect of single currency adoption in this Eastern European country. The findings support the view that there is room for the conduct of macro policies to become more supportive to the process of euro adoption and that the respect of convergence criteria would help in this respect. To our knowledge, this is the first study performing pairwise shock correlations between Romania and many other European economic entities, while also isolating the effect of post 2005 structural changes.
{"title":"Assessing the optimality of euro adoption in Romania through shock correlations","authors":"A. Bodea","doi":"10.17979/ejge.2021.10.2.7907","DOIUrl":"https://doi.org/10.17979/ejge.2021.10.2.7907","url":null,"abstract":"The present paper is concerned with the prospect of euro adoption in Romania. The study starts from the relevant literature of the Optimum Currency Areas and identifies the most widely acknowledged meta property and methodological model for this purpose: the SVAR Blanchard and Quah decomposition for identifying the supply and demand shocks. Employing the indicated model and the most recent data, we are able extract and analyse the underlying shocks that hit 34 European economic entities in the period 1995-2019, while also taking into account two crucial structural changes for the Romanian economy – central bank independence and EU accession. After performing the pairwise correlations between Romania and the rest of the economic entities for both the supply and demand disturbances, we map them on a bidimensional graph. We discover that while there is relevant integration and connectedness that ensures relatively high correlations between supply shocks, the politically-motivated monetary and fiscal policy disturbances that created ample and hectic demand side movements, are a factor of great concern for the prospect of single currency adoption in this Eastern European country. The findings support the view that there is room for the conduct of macro policies to become more supportive to the process of euro adoption and that the respect of convergence criteria would help in this respect. To our knowledge, this is the first study performing pairwise shock correlations between Romania and many other European economic entities, while also isolating the effect of post 2005 structural changes.","PeriodicalId":37945,"journal":{"name":"European Journal of Government and Economics","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2021-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"48493506","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2021-12-01DOI: 10.17979/ejge.2021.10.2.7803
Hana Zídková, Kristýna Balíková
Value Added Tax (VAT) is a significant source of fiscal revenues in the EU. However, the VAT treatment of cross-border supplies enables large-scale tax frauds, such as the Missing Trader Intra-Community (MTIC), which takes each year billions of euros from Member States' public budgets. In 2016 a definitive VAT system was proposed by the European Commission to respond to the shortcomings of the current temporary system. This new system should reduce the possibilities of MTIC fraud for intra-community transactions through the collection of VAT by the supplier in the same way as for domestic transactions. The tax collection by the supplier would impact the administrative costs of the financial authorities. This paper contributes to the discussion about the advantages and disadvantages of the newly suggested system. The analysis focuses on the study of the change in administrative costs and VAT revenues for individual Member States and across the EU. The results are that after implementing the definitive VAT system, total administrative costs of the Member States would increase at least by EUR 107 million, whereas total VAT revenues would rise by EUR 40 billion. This indicates the overall positive impact of the definitive VAT system for the EU. However, individual Member States would not benefit equally. The net exporters, whose intra-community supplies exceed the intra-community acquisitions, would spend more than others for the collection of VAT in connection with the international trade of goods.
{"title":"The definitive VAT system and its impact on tax collection","authors":"Hana Zídková, Kristýna Balíková","doi":"10.17979/ejge.2021.10.2.7803","DOIUrl":"https://doi.org/10.17979/ejge.2021.10.2.7803","url":null,"abstract":"Value Added Tax (VAT) is a significant source of fiscal revenues in the EU. However, the VAT treatment of cross-border supplies enables large-scale tax frauds, such as the Missing Trader Intra-Community (MTIC), which takes each year billions of euros from Member States' public budgets. In 2016 a definitive VAT system was proposed by the European Commission to respond to the shortcomings of the current temporary system. This new system should reduce the possibilities of MTIC fraud for intra-community transactions through the collection of VAT by the supplier in the same way as for domestic transactions. The tax collection by the supplier would impact the administrative costs of the financial authorities. This paper contributes to the discussion about the advantages and disadvantages of the newly suggested system. The analysis focuses on the study of the change in administrative costs and VAT revenues for individual Member States and across the EU. The results are that after implementing the definitive VAT system, total administrative costs of the Member States would increase at least by EUR 107 million, whereas total VAT revenues would rise by EUR 40 billion. This indicates the overall positive impact of the definitive VAT system for the EU. However, individual Member States would not benefit equally. The net exporters, whose intra-community supplies exceed the intra-community acquisitions, would spend more than others for the collection of VAT in connection with the international trade of goods.","PeriodicalId":37945,"journal":{"name":"European Journal of Government and Economics","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2021-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"41846915","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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