Taxation as a determinant of economic growth in South-Eastern Europe : the case of Bulgaria and Croatia

Abstract

Taxation through its impact on entrepreneurial activity, the attraction of Foreign Direct Investments, as well as disposable income and savings can be a crucial factor for economic growth. In this context, the paper examines the role of taxation as a determinant of macroeconomic stabilization in the geopolitical area of South-Eastern Europe, thus the area of Europe, which was affected in a great extent by the global financial crisis with a time lag (3rd Quarter 2008). The analysis will be based on the presentation of the current institutional tax framework prevailing in South-Eastern European Countries and focusing on the countries of the last and upcoming European Enlargement (Bulgaria, Croatia). The conceptual analysis will be accompanied by an econometric model that will test empirically the statistical significance of tax revenues on GDP of these countries.