Corruption and shadow economy in transition economies of European Union countries: a panel cointegration and causality analysis

Bayar, Yılmaz; Odabaş, Hakkı; Şaşmaz, Mahmut Ünsal; Öztürk, Ömer Faruk

doi:10.1080/1331677x.2018.1498010

Cited by 30 publications

(24 citation statements)

References 19 publications

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“…Corruption is closely connected to other negative phenomena, such as fiscal evasion, as found by several authors [13,19]. In addition, corruption and fiscal evasion are complementary in low-income countries, as evidenced by other researchers [20,21].…”

Section: Literature Reviewmentioning

confidence: 80%

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The Impact of Corruption and Rent-Seeking Behavior upon Economic Wealth in the European Union from a Public Choice Approach

Dincă

Negri

et al. 2021

Sustainability

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The current paper evaluates the impact of corruption and rent-seeking behaviors upon economic wealth in the European Union states using a public choice approach. The period of study is 2000 to 2019. To measure this impact, the present study uses a regression with variables reflecting governance quality and considered relevant, from a public choice approach, to corruption and rent-seeking. The main results of this study show a negative relationship between the level of corruption and economic wealth for all analyzed countries, especially for the ones that compose the new member states group. For all the EU member states, the variables capturing governance quality seem to have a positive impact on economic wealth. The higher levels of governance performance, synonymous with lower levels of rent-seeking, personal interest, and political pressures on state administrations, contribute to economic wealth, as public choice theory emphasizes. There is a need for reform and an increase in the efficiency of public institutions, especially in new member states.

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Section: Literature Reviewmentioning

confidence: 80%

“…The majority of reference literature papers revealed that corruption has a strong negative impact upon economic growth and upon the efficiency of economic activity [10][11][12][13][14]. Corruption negatively impacts private investments, employment rate, and income per capita [15].…”

Section: Literature Reviewmentioning

confidence: 99%

The Impact of Corruption and Rent-Seeking Behavior upon Economic Wealth in the European Union from a Public Choice Approach

Dincă

Negri

et al. 2021

Sustainability

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“…1 Corruption is one of the reasons for the high level of shadow economy in Bulgaria. Bayar et al (2018) demonstrated the empirical relationship between corruption, the shadow economy and the rule of law in the countries undergoing economic transition. The results of co-integration calculated on the basis of data for the 2003-2015 period indicate that the increase in the rule of law and anti-corruption policies has reduced the shadow economy.…”

Section: Resultsmentioning

confidence: 99%

Macroeconomic stability as the condition for Bulgaria to join the euro area

Moździerz

2019

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Research background: The subject of research is the macroeconomic situation of Bulgaria in the context of the country's preparations for joining the euro area. In 2018, the Bulgarian government approved a plan of preparations covering the period until the end of June 2019, which assumes that the country will join the ERM II mechanism in July 2019, and the euro area on 1 January 2022. Bulgaria meets four nominal convergence criteria regarding inflation, long-term interest rate, budget deficit and public debt. The national currency is pegged to the euro under the currency board arrangement. Despite this, the implementation of this optimistic scenario may be difficult because since the 2007 crisis, the European institutions pay more attention to macroeconomic stability and the sustainability of convergence. Purpose of the article: The aim of the article is to identify the factors destabilising macroeconomic equilibrium in Bulgaria, which are a potential obstacle to the adoption of the euro by Bulgaria on schedule. Methods: The research was based on the changes in selected macroeconomic indicators, as well as on the method used by the European Commission to detect macroeconomic imbalances. The observation and analysis covered the 2007–2018 period. Findings & Value added: The research results indicate that the low level of socio-economic convergence of Bulgaria and macroeconomic imbalances may delay its membership in the monetary union. Therefore, while respecting the country's aspirations to join the euro area, one cannot ignore the risk of another destabilisation of the euro area.

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“…The cointegration coefficients revealed a complementary interplay between the size of the shadow economy and corruption. Furthermore, the causality analysis indicated that there was a bilateral causality between control of corruption and the shadow economy in all the cross-section units (Bayar et al 2018).…”

Section: Literature Reviewmentioning

confidence: 93%

The Relationship between Corruption and the Shadow Economy in Ukraine and Other Central and Eastern European Countries

Cherviakova

2020

CER

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The article investigates the causes, essence, and peculiarities of corruption and the shadow economy, as well as how they are related, in Ukraine in comparison with other Central and Eastern European countries. A correlation‑regression analysis of statistical data revealed a direct correlation connection of different strengths and statistical significance between levels of corruption and the shadow economy in all Central and Eastern European countries. However, the degree to which corruption impacts the variation in the levels of the shadow economy differs significantly in countries across the region. The key conclusion is that in countries with relatively high levels of corruption and the shadow economy, corruption causes a smaller share of the shadow economy than in countries with relatively low levels of these phenomena. Causes of the weak correlation between levels of corruption and the shadow economy in Ukraine were identified. The main corruption and non‑corruption factors of Ukraine’s economy shadowing were determined. It was concluded that policy and measures to counteract corruption and the shadow economy in Ukraine should be aimed at eliminating their root causes rather than manifestations.

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Corruption and shadow economy in transition economies of European Union countries: a panel cointegration and causality analysis

Cited by 30 publications

References 19 publications

The Impact of Corruption and Rent-Seeking Behavior upon Economic Wealth in the European Union from a Public Choice Approach

The Impact of Corruption and Rent-Seeking Behavior upon Economic Wealth in the European Union from a Public Choice Approach

Macroeconomic stability as the condition for Bulgaria to join the euro area

The Relationship between Corruption and the Shadow Economy in Ukraine and Other Central and Eastern European Countries

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