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Type :article
Subject :HJ Public Finance
ISSN :0972-5784
Main Author :Norimah Rambeli
Additional Authors :Normala Zulkifli
Norasibah Abdul Jalil
Abulrah, Aldahmani Hamad Mohammed Asad
Gamal, Awadh Ahmed Mohammed
Title :Analysing the determinants of public expenditure in the United Arab Emirates (UAE): evidence from ARDL bounds testing approach
Place of Production :Tanjong Malim
Publisher :Fakulti Pengurusan dan Ekonomi
Year of Publication :2021
Corporate Name :Universiti Pendidikan Sultan Idris
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Abstract : Universiti Pendidikan Sultan Idris
This study examines the determinants of public expenditure in the UAE between 1975 and 2020,using the Gregory-Hansen cointegration and ARDL bounds testing approaches. The results confirm that cointegrating (long-run) relationship exist between public expenditure and the selected macroeconomic variables (oil price, tax burden, fiscal deficit, outflow of money, FDI outflow and interest rate), with a structural break in 1989. In addition, the results reveal that public expenditure in the UAE is determined by oil price, tax burden, fiscal deficit, outflow of money, FDI outflow, and interest rate both in the shorthand long-run. Based on these outcomes, the diversification of UAE’s public revenue, reduction of fiscal deficit, the elimination of unofficial remittance channels, implementation of investor-friendly trade policies, and interest rate stabilization are recommended, while strict monitoring of tax collection and blockage of tax leakages are advanced.


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