The Determinants of VAT Introduction: A Spatial Duration Analysis

P. Cizek, J. Lei, J.E. Ligthart

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Abstract

Abstract: The spatial survival models typically impose frailties, which characterize unobserved heterogeneity, to be spatially correlated. This specification relies highly on a pre-determinate covariance structure of the errors. However, the spatial effect may not only exist in the unobserved errors, but it can also be present in the baseline hazards and the dependent variables. A new spatial survival model with these three possible spatial correlation structures is explored and used to investigate the determinants of value-added tax implementation in 92 countries over the period 1970–2008 using the proposed model. The estimation results suggest the presence of a significant copycat effect among neighboring countries for both contiguity and distance weight matrices.
Original languageEnglish
Place of PublicationTilburg
PublisherEconometrics
Number of pages35
Volume2012-071
Publication statusPublished - 2012

Publication series

NameCentER Discussion Paper
Volume2012-071

Keywords

  • Spatial duration
  • MCMC
  • Metropolis-Hastings algorithm
  • Value-added tax

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