Statistics
| Number of Journals | 22 |
| Number of Issues | 501 |
| Number of Articles | 5,252 |
| Article View | 9,906,545 |
| PDF Download | 6,602,422 |
Estimating the Effects of Shadow Economy on Per Capita Income: Considering and Non-Considering the Problem of Endogeneity | ||
| فصلنامه مطالعات اقتصادی کاربردی ایران | ||
| Volume 11, Issue 44, March 2023, Pages 173-205 PDF (1007 K) | ||
| Document Type: Research Article | ||
| DOI: 10.22084/aes.2023.27465.3560 | ||
| Authors | ||
| Somaie Najafian1; Mohammd Hassan Fotros* 2; Gholamali Haji3 | ||
| 1Ph.D. Student in Economics, Department of Economics, Faculty of Management, Islamic Azad University, Arak Branch, Arak, Iran. | ||
| 2Professor, Department of Economics, School of Economic and Social Sciences, Bu-Ali Sina University, Hamadan, Iran | ||
| 3Assistant Professor, Department of Economics, Faculty of Management, Islamic Azad University, Arak Branch, Arak, Iran. | ||
| Abstract | ||
| Based on the theoretical literature, there are different and sometimes conflicting approaches about the effects of the shadow economy on per capita income. Considering the importance of this issue for economic policy, this study examines the effects of the shadow economy on per capita income for the period of 2005- 2017 using a panel generalized two stage estimator (PG2SLS) in two groups of developing and developed countries. Based on the results obtained in both groups, the size of the shadow economy has a negative effect on the per capita income. Also, the effects of the shadow economy on per capita income in developed countries are much higher than in developing countries, which is somewhat countrary to the theoretical framework. Stimating the model with the assumption of endogeneity of the shadow economy, for developing countries these effects have become negative and significant, but for developed countries these effects do not have the necessary significance. | ||
| Keywords | ||
| Shadow Economy; Per Capita Income; Developed Countries; Developing Countries; Panel Generalized Two-stage Least Squares | ||
|
Supplementary Files
|
||
| References | ||
|
[1] Arab Mazar Yazdi, A., 2001, “Black Economy in Iran, its Size, Causes and Effects in the Last Three Decades”. Planning and Budget Quarterly, 6 (2 & 3): 3-60. (In Persian).
[2] Asiedu, E. & Stengos, T., 2014, An Empirical Estimation of the Underground Economy in Ghana. Economics Research International.
[3] Baltagi, B., 2005, Econometric Analysis of Panel Data. Vol. 1. John Wiley & Sons.
[4] Birinci, S., 2013, “Trade Openness, Growth, and Informality: Panel VAR Evidence from OECD Economies”. Economics Bulletin, 33(1): 694-705.
[5] Devine, H., 2021, “How Institutions Shape the Informal Economy”. In: The Global Informal Workforce, USA: International Monetary Fund.
[6] Falahati, A.; Nazari, S. & Poshtehkeshi, M., 2020, “Institutional Quality, Natural Resource Rent, and Shadow Economy”. JEMR. 11 (39): 149-185. (In Persian).
[7] Farahti, A., 2020, “Modeling the Effects of Substitution of Taxes on the Size of the Shadow Economy (An Application for Iran's Economy)”. Economic Modeling, 14(50): 53-76. (In Persian).
[8] Fotros, M. H. & Dalaei Milan, A., 2016, “Examination of Underground Economy and Tax Evasion within the Framework of Dynamic Stochastic General Equilibrium Models (DSGE)”. Economic Growth and Development Research, 7(25): 65-84. (In Persian).
[9] Giles, D. E.; Tedds, L. M. & Werkneh, G., 2002, “The Canadian Underground and Measured Economies: Granger Causality Results”. Applied Economics, 34(18): 2347-2352.
[10] Goel, R. K.; Saunoris, J. W. & Schneider. F., 2017, “Growth in the Shadows: Effect of the Shadow Economy on US Economic Growth Over More Than a Century”. Contemporary Economic Policy, 37(1): 50-67.
[11] Hajilee, M.; Stringer, D. Y. & Metghalchi, M., 2017, “Financial Market Inclusion, Shadow Economy and Economic Growth: New Evidence from Emerging Economies”. The Quarterly Review of Economics and Finance, 66: 149-158.
[12] Im, K. S.; Pesaran, M. H. & Shin, Y., 2003, “Testing for Unit Roots in Heterogeneous Panels”. Journal of Econometrics, 115(1): 53-74.
[13] Levin, A.; Lin, C. F. & Chu, C. S. J., 2002, “Unit Root Tests in Panel Data: Asymptotic and Finite-Sample Properties”. Journal of Econometrics, 108(1): 1-24.
[14] Motallebi, M.; Alizadeh, M. & Faraji Dizaji, S., 2020, “Estimating the shadow economy and tax evasion using government financial discipline variables”. Quantitative Economics Research Quarterly, 16(4): 69-100. (In Persian).
[15] Medina, L. & Schneider, F., 2018, Shadow Economies Around the World: What Did We Learn Over the Last 20 Years? IMF Working Paper.
[16] Mehrabi Boshrabadi, H.; Kouchakzadeh, S. & Ttaboli, H., 2011, “Whether Shadow Economy Threats Economic Growth? (Case study: Iran)”. Iranian Journal of Economic Research, 15(45): 181-198.
[17] Nguyen, D. V. & Duong, T. H. M., 2021, “Shadow Economy, Corruption and Economic Growth: An Analysis of BRICS Countries”. The Journal of Asian Finance, Economics and Business, 8(4): 665–672.
[18] Pesaran, M. H., 2015, “Testing Weak Cross-Sectional Dependence in Large Panels”. Econometric Reviews, 34(6-10): Special Issue in Honor of Aman Ullah.
[19] Piraee, K. & Rajaee, H., 2015, “Estimate Size of Underground Economy in Iran and Investigation Causes and Effects”. Quarterly Journal of The Macro and Strategic Policies, 3(9): 21-42. (In Persian).
[20] Rafat, B. & Beyk Zadeh, S., 2012, “Using 2SLS Method for Analyzing the Simultaneous Effects of Economic Integration, Employment and Economic Growth”. Economic Growth and Development Research, 2(8): 22-9. (In Persian).
[21] Renani, M., 2011, “Employment Structure in the Informal Sector of the Country”. Economic Magazine (bimonthly magazine of economic issues and policies). 5 (49, 50): 21-39. (In Persian).
[22] Schneider, F., 2003, Shadow Economies of 145 Countries all over the World: Estimation Results over the Period 1999 to 2003. Johannes Kepler University of Linz, WP on www.econ.jkku.at/Schneider.
[23] Schneider, F.; Buehn, A. & Montenegro, C. E., 2010, “Shadow Economies All over the World: New Estimates for 162 Countries from 1999 to 2007”. Public Disclosure Authorized, Working Paper: 5356:1-52.
[24] Shahab, M. R. & Pajuyan, J., 2014, “The Relationship Between Shadow Economy and Economic Growth: An Empirical Analysis by Using Simultaneous Panel Equations. Information Journal Paper”. Financial Economics, 9(30): 1-28. (In Persian).
[25] Shahbazi, K.; Hasanzadeh, K. & Khoshkhabar, V., 2020, “Asymmetric Effects of Shadow Economy on Financial Development in Iran: NARDL Approach”. QJER, 20 (1): 204-185. (In Persian).
[26] Soares, C. & Afonso, Ó., 2019, “The Non-Observed Economy in Portugal: The Monetary Model and the MIMIC Model”. Metroeconomica, 70 (1): 172-208
[27] Wooldridge, J. M., 2002, Econometric Analysis of Cross Section and Panel Data. 1st Edition, The MIT Press.
[28] Wu, D. F. & Schneider, F., 2021, “Nonlinearity between the Shadow Economy and Economic Development”. In: The Global Informal Workforce, USA: International Monetary Fund. Retrieved Nov 23, 2021, from https://www.elibrary.imf.org/view/books/071/29292-9781513575919-en/ch004.xml
[29] Zaman, Gh. & Goschin, Z., 2015, “Shadow Economy and Economic Growth in Romania. Cons and Pros”. Procedia Economics and Finance, 22: 80-87. | ||
|
Statistics Article View: 547 PDF Download: 449 |
||
