Modelling elasticity of non-oil tax revenues to oil price changes: Is there U-Shaped association? Evidence from Azerbaijan

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Aliyev K., Ismayilov A., Gasimov I.

Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis, vol.67, no.3, pp.799-810, 2019 (Scopus)

• Nəşrin Növü: Article / Article
• Cild: 67 Say: 3
• Nəşr tarixi: 2019
• Doi nömrəsi: 10.11118/actaun201967030799
• jurnalın adı: Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis
• Jurnalın baxıldığı indekslər: Scopus
• Səhifə sayı: pp.799-810
• Açar sözlər: Firm behaviour, Import and sell, Natural resources, Non oil sector, Oil price changes, Produce and sell, Tax revenues, Threshold level
• Adres: Bəli

Qısa məlumat

Oil price changes has a great influence on the behaviour of firms in oil exporting countries which displays itself in amount of non-oil tax receipts of the state budget. Employing FMOLS, DOLS, and CCR cointegration methods for 2001Q1-2015Q4, the study aims to analyse how oil price changes affects non-oil tax revenues in Azerbaijan. Empirical results altogether provide strong scientific evidence that there is U-shaped causality from oil price changes to total non-oil tax revenues, corporate income tax receipts and labour income tax payments, and inverse U-shaped to non-oil VAT revenues of the state budget. Results show that firms face with the trade-off between “produce-and-sell” and “import-and-sell” as oil price rises. In case of higher price than the threshold level, companies prefer the latter choice. Research findings are highly useful for the public policy decision-makers in resource rich economies.