Search Advanced

National Accounting Review

2020, Volume 2, Issue 1: 53-65. doi: 10.3934/NAR.2020003
Previous Article Next Article
Research article

VAT experience as an influence on banking crises

  • Department of Public Economics, Universidad de Zaragoza, 250005, Zaragoza, Spain
  • Received: 09 December 2019 Accepted: 02 January 2020 Published: 06 January 2020

  • JEL Codes: G01, H25, G21, F19, F38

  • GST/VAT influences the economy by several channels. VAT does not fully apply to financial services,or these services are usually exempt on the tax,which leads to inefficiencies and could encourage banking crises. This paper employs a dataset of 36 EU and OECD countries for the period 1970–2011 and estimates panel probability models to empirically test the importance of VAT experience in banking crises. An increase of the risk of banking crises is correlated with VAT experience,as empirically checked. Therefore,GST/VAT reforms could pass by fully taxing the value added of financial services. This paper is useful for academicians,policy makers and practitioners.

    Citation: Guillermo Peña. VAT experience as an influence on banking crises[J]. National Accounting Review, 2020, 2(1): 53-65. doi: 10.3934/NAR.2020003

    Related Papers:

  • GST/VAT influences the economy by several channels. VAT does not fully apply to financial services,or these services are usually exempt on the tax,which leads to inefficiencies and could encourage banking crises. This paper employs a dataset of 36 EU and OECD countries for the period 1970–2011 and estimates panel probability models to empirically test the importance of VAT experience in banking crises. An increase of the risk of banking crises is correlated with VAT experience,as empirically checked. Therefore,GST/VAT reforms could pass by fully taxing the value added of financial services. This paper is useful for academicians,policy makers and practitioners.


    加载中


    [1] Beck T, Demirgüç-Kunt A, Levine R (2006) Bank concentration, competition, and crises: First results. J Bank Financ 30: 1581-1603. doi: 10.1016/j.jbankfin.2005.05.010
    [2] Boudriga A, Ghardallou W (2012) The Determinants of Banking Crises: The Case of the 2008 Worldwide Financial Crisis. In 29th International Conference of the French Finance Association (AFFI).
    [3] Büyükkarabacak B, Valev NT (2010) The role of household and business credit in banking crises. J Bank Financ 34: 1247-1256. doi: 10.1016/j.jbankfin.2009.11.022
    [4] Cavallo EA, Frankel JA (2008) Does openness to trade make countries more vulnerable to sudden stops, or less? Using gravity to establish causality. J Int Money Financ 27: 1430-1452.
    [5] Cesa-Bianchi A, Martin FE, Thwaites G (2019) Foreign booms, domestic busts: The global dimension of banking crises. J Financ Intermed 37: 58-74. doi: 10.1016/j.jfi.2018.07.001
    [6] Claessens S, Perotti E (2007) Finance and inequality: Channels and evidence. J Comp Econ 35: 748-773. doi: 10.1016/j.jce.2007.07.002
    [7] Demirguc-Kunt A, Detragiache E (1998) The determinants of banking crises in developing and developed countries. IMF Econ Rev 45: 81. doi: 10.2307/3867330
    [8] Gavin M, Hausmann R (1996) The Roots of Banking Crises: The Macroeconomic Context. Working Paper, Inter-American Development Bank, Office of the Chief Economist, No. 318.
    [9] Haddad M, Lim JJ, Pancaro C, et al. (2013) Trade openness reduces growth volatility when countries are well diversified. Can J Econ/Revue canadienne d'économique 46: 765-790.
    [10] Hardy D, Pazarbaşioğlu C (1999) Determinants and Leading Indicators of Banking Crises: Further Evidence. IMF Econ Rev 46: 247.
    [11] Icaviello M (2008) Household debt and income inequality: 1963-2003. J Money Credit Bank 40: 929-965. doi: 10.1111/j.1538-4616.2008.00142.x
    [12] IMF (2010) A Fair and Substantial Contribution by the Financial Sector: Final Report for the G20.
    [13] IMF (2019) World Economic Outlook Database.
    [14] Krugman P (2007) The conscience of a liberal, New York: W. W. Norton & Company (Chapter 12).
    [15] Kumhof M, Rancière R, Winant P (2015) Inequality, leverage, and crises. Am Econ Rev 105: 1217-1245. doi: 10.1257/aer.20110683
    [16] Laeven L, Valencia F (2013) Systemic banking crises database: an update. Macroeconomic Context. Working Paper, Inter-American Development Bank, 318
    [17] López-Laborda J, Peña G (2017a) Does financial VAT affect the size of the financial sector. Econ: Open-Access, Open-Assessment E-J 11: 1-28.
    [18] López-Laborda J, Peña G (2017b) International Practices of Financial VAT. Int VAT Monitor 28: 457-465.
    [19] López-Laborda J, Peña G (2018) A New Method for Applying VAT to Financial Services. Nat Tax J 71: 155-182. doi: 10.17310/ntj.2018.1.05
    [20] Mayer T, Zignago S (2011) Notes on CEPII's distances measures: the GeoDist Database. CEPII Working Paper 2011-25.
    [21] Neuhuas JM, Kalbfleisch JD, Hauck WW (1991) A comparison of cluster-specific and population averaged approaches for analyzing correlated binary data. Int Stat Rev 59: 25-35. doi: 10.2307/1403572
    [22] Nocetti D (2006) Central bank's value at risk and financial crises: an application to the 2001 Argentine crisis. J Appl Econ 9: 381-402. doi: 10.1080/15140326.2006.12040653
    [23] Pedro CP, Ramalho JJ, da Silva JV (2018) The main determinants of banking crises in OECD countries. Rev World Econ 154: 203-227. doi: 10.1007/s10290-017-0294-0
    [24] Peña G (2016) The determinants of banking crises: Further evidence. MPRA Working Paper nº 70093.
    [25] Peña G (2017a) Money, Lending and Banking Crises. Econ Pap J Appl Econ Policy 36: 444-458.
    [26] Peña G (2017b) Income inequality, fiscal consolidation and banking crises.
    [27] Rajan R (2010) Fault Lines, Princeton University Press, Princeton, NJ.
    [28] Rose AK, Spiegel MM (2010) Cross‐Country Causes and Consequences of the 2008 Crisis: International Linkages and American Exposure. Pacific Econ Rev 15: 340-363. doi: 10.1111/j.1468-0106.2010.00507.x
    [29] Rose AK, Spiegel MM (2011) Cross-country causes and consequences of the crisis: An update. Eur Econ Rev 55: 309-324. doi: 10.1016/j.euroecorev.2010.12.006
    [30] Roy S, Kemme DM (2012) Causes of banking crises: Deregulation, credit booms and asset bubbles, then and now. Int Rev Econ Financ 24: 270-294. doi: 10.1016/j.iref.2012.04.001
    [31] Sosa-Padilla C (2018) Sovereign defaults and banking crises. J Monetary Econ 99: 88-105. doi: 10.1016/j.jmoneco.2018.07.004
    [32] Stockhammer E (2013) Rising inequality as a cause of the present crisis. Cambridge J Econ 39: 935-958.
    [33] Wooldridge J (2002) Econometric Analysis of Cross Section and Panel Data, Cambridge: The MIT Press.
    [34] Ye Q, Han L (2010) The international propagation of shocks in international equity markets during the subprime mortgage crisis. In Future Information Technology and Management Engineering (FITME), 2010 International Conference on 2: 468-471, IEEE.
    [35] Wisman JD (2013) Wage stagnation, rising inequality and the financial crisis of 2008. Cambridge J Econ 37: 921-945. doi: 10.1093/cje/bes085
    [36] Zeger S, Liang K, Albert P (1988) Models for longitudinal data: a generalized estimating equation approach. Biometrics 44: 1049-1060. doi: 10.2307/2531734
  • Reader Comments
  • © 2020 the Author(s), licensee AIMS Press. This is an open access article distributed under the terms of the Creative Commons Attribution License (http://creativecommons.org/licenses/by/4.0)
通讯作者: 陈斌, bchen63@163.com
  • 1. 

    沈阳化工大学材料科学与工程学院 沈阳 110142

  1. 本站搜索
  2. 百度学术搜索
  3. 万方数据库搜索
  4. CNKI搜索
National Accounting Review
3.2

Metrics

Article views(3950) PDF downloads(452) Cited by(2)

Preview PDF
Download XML
Export Citation
Article outline

Figures and Tables

Tables(7)

Other Articles By Authors

Related pages

Tools

/

DownLoad:  Full-Size Img  PowerPoint
Return
Return

Catalog