Kofi Kamasa, George Adu and Eric Fosu Oteng-Abayie
The purpose of this paper is to find the effect of quality of tax administration on firm productivity in Sub-Saharan Africa (SSA). Also, the paper investigates whether the effect…
Abstract
Purpose
The purpose of this paper is to find the effect of quality of tax administration on firm productivity in Sub-Saharan Africa (SSA). Also, the paper investigates whether the effect of quality of tax administration on firm productivity varies with respect to firms of different ages and sizes.
Design/methodology/approach
The paper uses the World Bank Enterprise Survey data for 6,718 firms across 40 countries in SSA. By employing the least square method, the estimations are robust since country and industry heterogeneity are controlled, as well as other covariates that affect firm productivity such as capital, technology, business environment, infrastructure and firm characteristics.
Findings
Results of the paper reveal that productivity of firms reduces with poor quality of tax administration. With positive and significant interaction term coefficient between smaller firms and quality of tax administration, the findings also reveal that smaller firms do benefit in the presence of poor quality of tax administration than larger firms.
Originality/value
The study contributes to policy by providing empirical evidence on the impact that quality of tax administration has on firm productivity. Empirically, the paper is also the first to assess the effect of tax administration quality on firm productivity with sole emphasis on SSA (to the best of the authors’ knowledge after review of literature). The paper suggests reforms and improvement in tax administration so as to reduce compliance burden and improve productivity.
Details
Keywords
Emmanuel Duodu, Eric Fosu Oteng-Abayie, Prince Boakye Frimpong and Paul Owusu Takyi
This study is motivated by the Compact with Africa (CWA) initiative to promote foreign direct investment (FDI) in Africa. However, FDI is argued to be one of the primary causes of…
Abstract
Purpose
This study is motivated by the Compact with Africa (CWA) initiative to promote foreign direct investment (FDI) in Africa. However, FDI is argued to be one of the primary causes of environmental pollution (CO2 emissions). In that regard, this study estimates the impact of the CWA initiative on FDI and environmental pollution.
Design/methodology/approach
The study utilized the difference-in-difference (DID) and triple difference (DDD) estimation strategies to examine the causal impact of the CWA initiative on FDI and environmental pollution from 2005 to 2019. The study selected nine CWA countries and nine non-CWA countries as treatment and control samples.
Findings
The authors found that the CWA initiative positively promotes FDI in the participant countries compared to non-participant countries. The CWA initiative also promoted environmental pollution in the CWA countries compared to non-CWA countries. Furthermore, the DDD estimates show that the effect of the CWA initiative on environmental pollution is through FDI.
Practical implications
The authors recommend policies to attract environmentally friendly FDI for both Compact and non-Compact economies.
Originality/value
The study is the first to provide empirical evidence on the CWA initiative on FDI and environmental pollution in Africa. The study used a quasi-experimental method on the relationship between FDI and environmental pollution in Africa.