TRADE LIBERALIZATION AND FISCAL STANCE IN SELECTED DEVELOPING COUNTRIES: A GRANGER CAUSALITY APPROACH IN VAR FRAMEWORK

Authors

  • BISMILLAH PhD Scholar, The Women University Multan, Pakistan Author
  • SHAHNAWAZ MALIK Professor (Rtd), Department of Economics, The Women University, Multan, Pakistan Author
  • MUHAMMAD RAMZAN SHEIKH Associate Professor, School of Economics Bahauddin Zakariya University, Multan, Pakistan Author

DOI:

https://doi.org/10.61506/

Keywords:

Trade liberalization, Tax, Government Expenditures,, External Debt

Abstract

The main purpose of the study is to conduct a causality analysis of trade liberalization and fiscal stance. For this purpose, causality between tax-trade, government expenditures-trade, external debt-trade and official development assistance-trade have been examined in selected developing countries. The study has applied the three-step procedure of Granger causality in the VAR framework. The period is taken from 1996 to 2019. The results show that there is bidirectional causality between trade liberalization and fiscal stance in nearly all countries while short-run causality differs in the group of countries. The study suggests that the policymakers may formulate policies of trade openness which may enhance the tax revenues as well as government expenditures in developing countries.

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Published

2022-06-01

Issue

Section

Articles

How to Cite

BISMILLAH, MALIK, S. ., & SHEIKH, M. R. . (2022). TRADE LIBERALIZATION AND FISCAL STANCE IN SELECTED DEVELOPING COUNTRIES: A GRANGER CAUSALITY APPROACH IN VAR FRAMEWORK. Bulletin of Business and Economics (BBE), 11(2), 134-159. https://doi.org/10.61506/