This paper analyzes the effect of refugee inflows on the shadow, or underground, economy of host nations using panel data for 120 countries over the 1991-2017 period. The results show that refugee ...inflows increase the size of the shadow economy, particularly in low- and middle-income countries.
This paper considers an alternate dimension of government institutions associated with the separation of powers between government and its central bank. A more independent central bank is consistent ...with greater institutional quality and constraints on government. We propose that central bank independence influences the prevalence of the shadow, or underground, economy. Using cross‐country panel data for over 100 nations over the period 1991 to 2012, the results from instrumental variables techniques show that central bank independence curbs underground economic activity. Furthermore, considering different dimensions of independence, we find that independence related to central bank CEO, policy formation, and central bank lending are effective at checking the shadow sector. Overall, these findings are robust to a different measure of the underground economy, correcting for the potential influence of outliers, controlling for the impact of additional factors, accounting for heterogeneity related to the level of development, and considering the heterogeneity related to the prevalence of the shadow sector. The main implication of the results is that nations seeking to reduce the prevalence of the underground economy would benefit from policies that promote central bank independence.
We estimate the relationship between Division I NCAA basketball program expenditure and team success. Results indicate that increases in expenditure are significantly associated with increases in the ...probability that teams advance to the end-of-season tournament. However, an increase in expenditure impacts teams differently across the division. Specifically, those teams which spend the least on their basketball programs have the most to gain. Results also suggest that increases in team expenditure impact women's teams more than men's teams. Given that the women's league is less competitive, these results might imply that a more balanced expenditure could lead to a more competitive league.
This paper examines the dynamic relationship between financial development and the shadow economy using data for 161 countries over the period 1960–2009. Specifically, we use a panel vector ...autoregression model to construct impulse response functions that illustrate the time path of one variable (e.g., the shadow economy) following an orthogonal shock to another variable (e.g., financial development). We find that financial development reduces the size of the shadow economy. Moreover, there is some evidence of reverse causality between these variables; namely, a shock to shadow economy inhibits financial development.
•The results suggest that financial development shrinks the shadow economy.•There is some evidence of reverse causality between these two variables.•The findings are robust across several measures of financial development.•The results suggest some differences across level of financial development.•Impulse response functions illustrate significant dynamic interrelationships.
This article examines the impact of economic freedom on the shadow economy. Using panel data on over 100 countries from 2000 to 2015, we find that economic freedom is effective at reducing the spread ...of the shadow economy. Moreover, after disaggregating economic freedom into its five main components, the results suggest that all aspects of economic freedom significantly mitigate shadow activities with freedom from regulation exhibiting the largest impact. Overall, these findings are robust after accounting for alternate measures of the shadow economy, simultaneity, outliers, and nonlinearities. Thus, countries aiming to combat the spread of shadow activities would benefit from policies that support economic freedom.
We investigate the impact of globalisation on the shadow economy using panel data for 119 countries. Our evidence suggests that globalisation matters in mitigating shadow development. More ...specifically, we find that political globalisation reduces the shadow economy, whereas economic and social globalisations have limited statistical support after controlling for important factors that affect the size of the shadow economy. Overall, these results are robust after accounting for an alternative measure of the shadow economy, outliers, endogeneity and alternative model specifications.
This paper examines the relationship between globalisation and the size of the shadow economy, focusing on the differential effects of de jure and de facto globalisation. Using panel data on over 120 ...countries from 1991 to 2017, the results suggest that globalisation reduces the prevalence of the shadow economy. Furthermore, after differentiating between de jure and de facto globalisation, we find that both de facto and de jure globalisation are effective in curbing the spread of the shadow economy, with de jure globalisation showing a marginally larger impact. However, once we disaggregate the sample into OECD and non‐OECD countries, the results show that it is mainly the OECD countries driving this result while the influence of globalisation is statistically insignificant in non‐OECD countries. These results withstand a series of robustness analyses and offer important policy implications.
This paper examines the impact of poverty on the size of the shadow economy using cross‐country panel data for over 100 countries for the period 1991–2015. The results show that poverty has a ...positive and significant effect on the size of the shadow economy. Furthermore, we argue that the quality and size of governmental institutions matter in moderating the impact of poverty on the shadow economy. Considering the interactions between poverty and government quality and size, we find that poverty has the largest effect on the size of the shadow economy when government quality is the lowest and the size of the government is the largest. These results withstand a battery of robustness checks.
Corruption and Entrepreneurship Berdiev, Aziz N.; Saunoris, James W.
Southern economic journal,
01/2018, Letnik:
84, Številka:
3
Journal Article
Recenzirano
Odprti dostop
While the impact of institutional quality on formal entrepreneurial activity has been well documented in the literature, whether and to what extent corruption influences entrepreneurship in the ...informal sector is less forthcoming. In this article, we analyze the effect of corruption on entrepreneurship in the formal and informal sectors. Using unique cross-country data on formal and informal entrepreneurship, we find that corruption deters entrepreneurship in the formal sector and promotes informal entrepreneurship. These results remain robust even after conducting a series of sensitivity analyses.
•We examine whether the impact of ethnic inequality on development works both directly and indirectly (through corruption).•Results show a significant negative impact of ethnic inequality on ...development that is indeed channeled through corruption.•Findings suggest that about two-thirds of ethnic inequality’s influence on economic development flows through corruption.
The influence of ethnic and income disparities in terms of their impacts on nations’ economic development have long intrigued researchers. On the empirical side, recent developments in creating a composite measure of income inequality based on ethnic diversity have shown a negative impact of ethnic inequality on economic development. This approach, while insightful, ignores the crucial role of governmental institutions. To account for this, we introduce the intermediary role of an important dimension of institutional quality (proxied by corruption) and test, employing mediation analysis, whether it is a significant mediator in the effect of ethnic inequality on economic development. Using a cross-section of data on a large sample of nations, results show a significant negative impact of ethnic inequality on development that is indeed channeled through corruption. Specifically, findings suggest that about two-thirds of ethnic inequality’s influence on economic development flows through corruption whereas, only one-third of the total influence is directly ascribed to ethnic inequality. Thus, policy efforts to control ethnic and income disparities that do not take account of the influence of corruption are unlikely to attain development goals.
