Do remittances increase tax revenues in developing countries? Evidence from the threshold regression models

Do remittances increase tax revenues in developing countries? Evidence from the threshold regression models | Research Square window.SnipcartSettings = { analytics: { enabled: false } }; (function() { var accessVector = localStorage.getItem('access_vector') || ''; window.dataLayer = window.dataLayer || []; if (accessVector) { window.dataLayer.push({ user: { profile: { profileInfo: { snid: accessVector } } } }); } })(); (function(w,d,s,l,i){w[l]=w[l]||[];w[l].push({'gtm.start':new Date().getTime(),event:'gtm.js'});var f=d.getElementsByTagName(s)[0],j=d.createElement(s),dl=l!='dataLayer'?'&l='+l:'';j.async=true;j.src='https://www.googletagmanager.com/gtm.js?id='+i+dl;f.parentNode.insertBefore(j,f);})(window,document,'script','dataLayer','GTM-K279D39R'); Browse Preprints In Review Journals COVID-19 Preprints AJE Video Bytes Research Tools Research Promotion AJE Professional Editing AJE Rubriq About Preprint Platform In Review Editorial Policies Our Team Advisory Board Help Center Sign In Submit a Preprint Cite Share Download PDF Research Article Do remittances increase tax revenues in developing countries? Evidence from the threshold regression models Chrysost BANGAKE, Désiré AVOM, Hermann NDOYA, Prince ADOUMA This is a preprint; it has not been peer reviewed by a journal. https://doi.org/ 10.21203/rs.3.rs-2206459/v1 This work is licensed under a CC BY 4.0 License Status: Posted Version 1 posted You are reading this latest preprint version Abstract This paper provides original econometric evidence on the effect of remittances on tax revenue in developing countries. In applying the system generalized methods of moments (SGMM) and the panel threshold regression method to a sample of 83 developing countries over the period 1990–2019, we find two major results. First, remittances positively and significantly affect tax revenue in developing countries. Second, as far as the nonlinear relationship is concerned, we find two extreme regimes with a smooth shift characterizing the remittances-tax revenue nexus, with respect to conditional variables; remittance effects are positive and significant under the first regime and negative and significant under the second. Furthermore, our findings show that the nonlinear relationship between remittances and tax revenue depends on the levels of informal economy, law and order, corruption and trade openness. Remittances Tax revenue Nonlinear Relationship Panel Threshold Regression JEL: F22 E62 B23 Full Text Additional Declarations No competing interests reported. Cite Share Download PDF Status: Posted Version 1 posted You are reading this latest preprint version Research Square lets you share your work early, gain feedback from the community, and start making changes to your manuscript prior to peer review in a journal. As a division of Research Square Company, we’re committed to making research communication faster, fairer, and more useful. We do this by developing innovative software and high quality services for the global research community. Our growing team is made up of researchers and industry professionals working together to solve the most critical problems facing scientific publishing. Also discoverable on Platform About Our Team In Review Editorial Policies Advisory Board Help Center Resources Author Services Accessibility API Access RSS feed Manage Cookie Preferences © Research Square 2026 | ISSN 2693-5015 (online) Privacy Policy Terms of Service Do Not Sell My Personal Information {"props":{"pageProps":{"initialData":{"identity":"rs-2206459","acceptedTermsAndConditions":true,"allowDirectSubmit":true,"archivedVersions":[],"articleType":"Research Article","associatedPublications":[],"authors":[{"id":147539998,"identity":"c8105c64-1931-498a-a7e5-75111d5ef312","order_by":0,"name":"Chrysost BANGAKE","email":"data:image/png;base64,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","orcid":"","institution":"Univ. Artois, UMR 9221, Lille Economie Mangement (LEM), Arras, F-62000, France","correspondingAuthor":true,"prefix":"","firstName":"Chrysost","middleName":"","lastName":"BANGAKE","suffix":""},{"id":147539999,"identity":"df18ef84-2713-4e56-ada9-721a42c451d7","order_by":1,"name":"Désiré AVOM","email":"","orcid":"","institution":"University of Yaoundé II","correspondingAuthor":false,"prefix":"","firstName":"Désiré","middleName":"","lastName":"AVOM","suffix":""},{"id":147540000,"identity":"d422fb88-85c7-4907-9000-6310d6b390b2","order_by":2,"name":"Hermann NDOYA","email":"","orcid":"","institution":"Université de Dschang","correspondingAuthor":false,"prefix":"","firstName":"Hermann","middleName":"","lastName":"NDOYA","suffix":""},{"id":147540001,"identity":"1c0498ec-4507-4467-ab5e-171b3d090e61","order_by":3,"name":"Prince ADOUMA","email":"","orcid":"","institution":"Université de Dschang","correspondingAuthor":false,"prefix":"","firstName":"Prince","middleName":"","lastName":"ADOUMA","suffix":""}],"badges":[],"createdAt":"2022-10-26 13:59:22","currentVersionCode":1,"declarations":"","doi":"10.21203/rs.3.rs-2206459/v1","doiUrl":"https://doi.org/10.21203/rs.3.rs-2206459/v1","draftVersion":[],"editorialEvents":[],"editorialNote":"","failedWorkflow":false,"files":[{"id":32157339,"identity":"796aa2f8-213a-4685-8158-f366db37e9a2","added_by":"auto","created_at":"2023-01-28 14:29:29","extension":"pdf","order_by":1,"title":"","display":"","copyAsset":false,"role":"manuscript-pdf","size":325577,"visible":true,"origin":"","legend":"","description":"","filename":"Maindocument1.pdf","url":"https://assets-eu.researchsquare.com/files/rs-2206459/v1_covered.pdf"},{"id":28504668,"identity":"784938a4-2c94-4bea-9951-934da8873ba3","added_by":"auto","created_at":"2022-11-01 11:22:20","extension":"pdf","order_by":1,"title":"","display":"","copyAsset":false,"role":"manuscript-pdf","size":319882,"visible":true,"origin":"","legend":"","description":"","filename":"Maindocument1.pdf","url":"https://assets-eu.researchsquare.com/files/rs-2206459/v1_covered.pdf"}],"financialInterests":"No competing interests reported.","formattedTitle":"Do remittances increase tax revenues in developing countries? Evidence from the threshold regression models","fulltext":[],"fulltextSource":"","fullText":"","funders":[],"hasAdminPriorityOnWorkflow":false,"hasManuscriptDocX":false,"hasOptedInToPreprint":true,"hasPassedJournalQc":"","hasAnyPriority":false,"hideJournal":true,"highlight":"","institution":"","isAcceptedByJournal":false,"isAuthorSuppliedPdf":true,"isDeskRejected":"","isHiddenFromSearch":false,"isInQc":false,"isInWorkflow":false,"isPdf":true,"isPdfUpToDate":true,"isWithdrawnOrRetracted":false,"journal":{"display":true,"email":"[email protected]","identity":"researchsquare","isNatureJournal":false,"hasQc":true,"allowDirectSubmit":true,"externalIdentity":"","sideBox":"","snPcode":"","submissionUrl":"/submission","title":"Research Square","twitterHandle":"researchsquare","acdcEnabled":true,"dfaEnabled":false,"editorialSystem":"","reportingPortfolio":"","inReviewEnabled":false,"inReviewRevisionsEnabled":true},"keywords":"Remittances, Tax revenue, Nonlinear Relationship, Panel Threshold Regression JEL: F22 E62 B23","lastPublishedDoi":"10.21203/rs.3.rs-2206459/v1","lastPublishedDoiUrl":"https://doi.org/10.21203/rs.3.rs-2206459/v1","license":{"name":"CC BY 4.0","url":"https://creativecommons.org/licenses/by/4.0/"},"manuscriptAbstract":"\u003cp\u003eThis paper provides original econometric evidence on the effect of remittances on tax revenue in developing countries. In applying the system generalized methods of moments (SGMM) and the panel threshold regression method to a sample of 83 developing countries over the period 1990\u0026ndash;2019, we find two major results. First, remittances positively and significantly affect tax revenue in developing countries. Second, as far as the nonlinear relationship is concerned, we find two extreme regimes with a smooth shift characterizing the remittances-tax revenue nexus, with respect to conditional variables; remittance effects are positive and significant under the first regime and negative and significant under the second. Furthermore, our findings show that the nonlinear relationship between remittances and tax revenue depends on the levels of informal economy, law and order, corruption and trade openness.\u003c/p\u003e","manuscriptTitle":"Do remittances increase tax revenues in developing countries? Evidence from the threshold regression models","msid":"","msnumber":"","nonDraftVersions":[{"code":1,"date":"2022-11-01 11:22:06","doi":"10.21203/rs.3.rs-2206459/v1","editorialEvents":[{"type":"communityComments","content":0}],"status":"published","journal":{"display":true,"email":"[email protected]","identity":"researchsquare","isNatureJournal":false,"hasQc":true,"allowDirectSubmit":true,"externalIdentity":"","sideBox":"","snPcode":"","submissionUrl":"/submission","title":"Research Square","twitterHandle":"researchsquare","acdcEnabled":true,"dfaEnabled":false,"editorialSystem":"","reportingPortfolio":"","inReviewEnabled":false,"inReviewRevisionsEnabled":true}}],"origin":"","ownerIdentity":"8ec8e0bf-cb20-4f55-8a77-4b1cd8dc476d","owner":[],"postedDate":"November 1st, 2022","published":true,"recentEditorialEvents":[],"rejectedJournal":[],"revision":"","amendment":"","status":"posted","subjectAreas":[],"tags":[],"updatedAt":"2023-01-28T14:29:13+00:00","versionOfRecord":[],"versionCreatedAt":"2022-11-01 11:22:06","video":"","vorDoi":"","vorDoiUrl":"","workflowStages":[]},"version":"v1","identity":"rs-2206459","journalConfig":"researchsquare"},"__N_SSP":true},"page":"/article/[identity]/[[...version]]","query":{"redirect":"/article/rs-2206459","identity":"rs-2206459","version":["v1"]},"buildId":"_2-kVJe1T_tPrBINL-cwx","isFallback":false,"isExperimentalCompile":false,"dynamicIds":[84888],"gssp":true,"scriptLoader":[]}