Relationship Between the Middle-Income Trap and the Composition of Tax Revenues: Evidence from Emerging G20

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SOSYOEKONOMI, no.59, pp.223-248, 2024 (ESCI) identifier

  • Publication Type: Article / Article
  • Publication Date: 2024
  • Doi Number: 10.17233/sosyoekonomi.2024.01.10
  • Journal Name: SOSYOEKONOMI
  • Journal Indexes: Emerging Sources Citation Index (ESCI), TR DİZİN (ULAKBİM)
  • Page Numbers: pp.223-248
  • Anadolu University Affiliated: Yes


It is widely stated that countries that cannot reach the high -income level by being stuck in the middle -income level for a long time may be caught in the middle -income trap. In this study, firstly, whether the examined countries (Emerging G20) are in the middle -income trap or not was investigated with the Narayan & Popp (ADF Test) (Model A) unit root test with structural break(s), which is one of the second -generation unit root tests structural break(s) that allows two breaks at the level. In the second stage, the Dumitrescu & Hurlin Panel Causality Test was applied to investigate the possible causal relationship between the composition of tax revenues and income level in the examined countries. In the last stage, the potential impact of getting rid of the middle -income trap on the composition of tax revenues in the countries subject to the analysis was investigated with the static panel data analysis method. In the study, a mutual causality relationship was determined between the composition of tax revenues and the income level of the countries, and at the same time, it was detected that although the increase in income enhances the share of indirect taxes in total tax revenues in the countries that still in the middle -income trap, this share decreased in case of exit from the middleincome trap with the increase in income level.