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Journal : JDE (Journal of Developing Economies)

Impacts of Taxation on Economic Growth in Africa in 2008-2018 - Panel Data Analysis Kessy, Mercy; Sukartini, Ni Made
Journal of Developing Economies Vol. 8 No. 2 (2023)
Publisher : Universitas Airlangga

Show Abstract | Download Original | Original Source | Check in Google Scholar | DOI: 10.20473/jde.v8i2.43290

Abstract

The debate over the effectiveness of taxes as a tool for promoting economic growth still needs to be solved, with several studies indicating mixed effects of taxes on economic growth. The purpose of this research is to assess the impact of taxation on economic growth in Africa. The study spans eleven years, from 2008 to 2018, and includes multiple variables for 21 African countries. GDP is a dependent variable used as a proxy for economic growth. Numerous GDP-determining predictors were utilized as independent variables; these variables were categorized into three groups: The supply side consists of human capital (population and literacy rate) and economic activities (trade and services). Demand side variables include consumption, government expenditures, net exports, and gross capital formation. Lastly, taxation variables consist of tax revenue, corporate tax rate, number of tax payments, personal income tax, and taxes on income, profits, and capital gains. The study conducted preliminary tests, including descriptive statistics, correlation matrix, and pooled least square estimations for panel data. Based on the results, all macroeconomic determinants have statistically significant effects on GDP except trade. Tax revenue and corporate tax rate positively affect GDP, while personal income tax rate and tax on income, profit, and capital gain negatively affect GDP. In general, taxation has a favorable effect on the economy of African countries because emerging countries use taxation as an internal key to generate revenue and improve economic growth.
Debt And Happiness: A Generalized Order Logit Analysis Purwanto, Edy; Purwono, Rudi; Sukartini, Ni Made
Journal of Developing Economies Vol. 10 No. 2 (2025)
Publisher : Universitas Airlangga

Show Abstract | Download Original | Original Source | Check in Google Scholar | DOI: 10.20473/jde.v10i2.70785

Abstract

Objective: Financial literacy can influence borrowing attitudes and behaviors. Low financial literacy among Indonesians may impair debt manageability and lead to psychological distress. This empirical research aimed to analyze the effects of debt on happiness in Indonesia. Methods: This study used cross-sectional data from the 2007 Indonesia Family Life Survey (IFLS). Happiness was measured on a four-point ordinal scale, namely very unhappy (1), unhappy (2), happy (3), and very happy (4). Given the nature of the dependent variable, a generalized ordered logit model was applied to estimate the relationship between debt and happiness. This approach is well-suited to address the study objective by capturing varying effects across different levels of happiness. Findings: Results showed a significant negative relationship between debt and happiness (coefficient = -0.145, p < 0.01). The marginal effect indicated that debt reduced the likelihood of being happy and very happy by -0.20% and -0.83%, respectively. Depression had the strongest negative impact (-5.67%), while marriage (4.03%), household economic adequacy (3.40%), health care (2.31%), and physical health (1.99%) were the positive contributors. Originality/Value: This study contributed to the limited research examining the link between debt and well-being in developing economies, focusing on Indonesia’s socioeconomic and cultural context. Practical/Policy implication: Financial literacy needs to be enhanced to improve borrowing decisions and debt management among Indonesians. Strengthening financial education programs and regulating non-formal lenders are essential to prevent exploitative lending practices. Moreover, integrating debt awareness into mental health programs and disseminating information through mass and social media can help mitigate the psychological impact of debt.