The hidden economy in Jordan: A MIMIC approach

Abu-Alfoul, Mohammed N.; Mishal, Zakia Ahmad; Schneider, Friedrich; Magableh, Khaled; Alabdulraheem, Abeer Rafi

doi:10.1080/23322039.2022.2031434

Cited by 4 publications

(2 citation statements)

References 27 publications

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“…Lastly, macroeconomic variables such as inflation and poverty emerge as important determinants of the size of the shadow economy in line with the literature. The positive coefficient of the inflation variable suggests that a higher inflation rate increases the size of the shadow economy, which is in line with the previous literature [65][66][67]. According to Goel and Nelson [67], this should not be surprising as inflation is an input used to calculate the shadow economy proxy used in the analysis.…”

Section: Resultssupporting

confidence: 86%

What Determines the Shadow Economy? An Extreme Bounds Analysis

2022

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The purpose of this paper was to identify the leading causes determining the shadow economy at the global level. The empirical analysis used was the Sala-i-Martin version of extreme bounds analysis (EBA) applied to a cross-sectional sample of 132 countries. The results suggested that the quality of institutions is the primary determinant of the shadow economy. The results showed that only four out of six factors of the quality of institutions proved to be robust determining factors of the shadow economy; they are bureaucracy quality, law and order, corruption, and internal conflict. Moreover, monetary freedom and secured property rights are also robust and negatively related to the shadow economy. An interesting result is that information and communication technology (ICT) development is vital to the shadow economy. Mainly, internet usage is robust and negatively associated with the shadow economy. Furthermore, inflation and poverty emerge as key determining factors of the shadow economy. Our findings will aid in the development of recommendations for potential strategies to minimize the international extent of the shadow economy.

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Section: Resultssupporting

confidence: 86%

What Determines the Shadow Economy? An Extreme Bounds Analysis

2022

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“…The hidden economy, also called the informal economy, underground economy, or black economy refers to any illegal economic activity that evades government taxation or regulation and the income generated from it [15]. The three methods of measuring the hidden economy are direct [16], indirect [17], and modeling [18]. In addition to research on how to calculate the hidden economic scale, numerous scholars have studied its impact from different perspectives.…”

Section: Literature Reviewmentioning

confidence: 99%

Spatial Spillover Effect of Pollution under Heterogeneous Environmental Regulations in the Perspective of Hidden Economy

Song¹,

Tang²,

Feng³

2023

Pol. J. Environ. Stud.

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The hidden economy, as an important source of environmental pollution, can have a significant impact on environmental regulation, but it has not received much attention as an indicator of institutional weakness. Therefore, this study took the Yangtze River Economic Belt (YREB) as the research object and used the MIMIC model and entropy method to measure the hidden economic scale and environmental pollution index of its 112 cities from 2011 to 2020, respectively. We applied the spatial Durbin model to analyze the effect of heterogeneous environmental regulation (formal and informal environmental regulation) and hidden economies on pollution. It is found that: (1) the average hidden economic scale of YREB from 2011 to 2020 was between 13.15% and 14.30% and showed a slow upward trend. (2) Environmental pollution in the YREB had obvious spatial clustering characteristics, with high pollution clustering areas mainly in Chongqing in the upper reaches and Hubei, Anhui, and Jiangsu in the middle and lower reaches, while low pollution clustering areas were mainly in Yunnan and Sichuan in the upper reaches. (3) Formal environmental regulation reduced pollution directly, and on the other hand exacerbated it through interaction with the hidden economy. Overall, an environmental regulation's net effect depended on the hidden economic scale. Informal environmental regulation effectively reduced local hidden economic activity and was an effective mean to govern the hidden economy and pollution. Accordingly, the government should formulate appropriate laws and regulations to guide the legal part of the hidden economy to gradually shift to the official economy, and at the same time adopt a diversified environmental protection strategy to jointly combat pollution in the YREB.

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The determinants of the hidden economy in developed and developing countries

Khatatbeh

Abu-Alfoul

2023

Applied Economics Letters

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The hidden economy in Jordan: A MIMIC approach

Cited by 4 publications

References 27 publications

What Determines the Shadow Economy? An Extreme Bounds Analysis

What Determines the Shadow Economy? An Extreme Bounds Analysis

Spatial Spillover Effect of Pollution under Heterogeneous Environmental Regulations in the Perspective of Hidden Economy

The determinants of the hidden economy in developed and developing countries

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