Posts categorized under Tourism

Evolution of price-cost margins during the troika intervention

November 12, 2022
The paper asks if the troika intervention of 2011 - 2014 helped promote a more competitive environment and improve the allocation of scarce resources to benefit economic growth and welfare. The question is generally pertinent, especially during this period where resources were scarce in the public, corporate, and financial sectors. The paper uses data for the period 2010-2016 from Informação Empresarial Simplicaficada, a database containing the annual accounts of Portuguese manufacturing and services firms.

The repercussions of the 2011 VAT increase on the tourism industry

January 4, 2021
Does a significant increase in VAT rates harm the tourism industry and if so how much? This paper investigates the consequences of a large increase in VAT rates on firm profitability and survival. In 2011, the Portuguese government increased the VAT by ten percentage points on catering services, restaurant meals, and beverages. The tourism sector in Portugal represents the biggest sector of the economy, and is composed of many small and medium-size firms, which are generally affected the most by such tax changes, at the same time being essential contributors to job creation and economic development.