2022
DOI: 10.1108/ijoem-12-2021-1934
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Government expenditure–shadow economy nexus: the role of fiscal deficit

Abstract: PurposeThe effects of government expenditure on the shadow economy have been investigated. However, the effect from a moderating factor that affects this relationship has been largely ignored in the existing literature. This paper investigates how fiscal deficit moderates the effects of government expenditure on the shadow economy for 32 Asian countries for the past two decades since 2000.Design/methodology/approachThe authors use various techniques, which allow cross-sectional dependence and slope homogeneity… Show more

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Cited by 10 publications
(10 citation statements)
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“…Seven main control variables were selected from the report of the previous research. (1) level of GDP growth (GDPgr) is represented by the annual percentage growth rate of GDP [ 71 73 ]. (2) As a measure of urbanization (URBA), we utilize the ratio of urban population to total population [ 74 , 75 ].…”
Section: Dataset and Methodologymentioning
confidence: 99%
See 1 more Smart Citation
“…Seven main control variables were selected from the report of the previous research. (1) level of GDP growth (GDPgr) is represented by the annual percentage growth rate of GDP [ 71 73 ]. (2) As a measure of urbanization (URBA), we utilize the ratio of urban population to total population [ 74 , 75 ].…”
Section: Dataset and Methodologymentioning
confidence: 99%
“…(3) foreign direct investment (FDI) is measured by net inflows of FDI as a percentage of GDP [ 9 , 10 , 76 ]. (4) Government expenditure (EXPEND), measured as the general government’s final consumption expenditure as a percentage of GDP [ 73 ]. (5) KOF Globalization Index (KOFGI) so as to measure globalization [ 15 , 17 , 77 ].…”
Section: Dataset and Methodologymentioning
confidence: 99%
“…Unemployment is considered as one of the main determinants of informal economy (Dell'Anno et al, 2007). High unemployment rate increases the expansion of informal economy because it provides individuals more incentive to work in the informal sector to earn a living (Tran et al, 2022). Previous studies (Maule on and Sard a, 2017; Blanton and Peksen, 2019) confirm the positive impact of unemployment on the expansion of informal economy.…”
Section: Unemploymentmentioning
confidence: 98%
“…Countries with high rate of inflation are likely to have a greater size of the informal economy (Hassan and Schneider, 2016). A high and persistent inflationary environment brings economic hardships, creating the incentive to engage in informal employment to evade taxes (Tran et al , 2022). Trade openness …”
Section: Model and Datamentioning
confidence: 99%
“…Governments, the public sector, public organizations, and agencies that do not use a knowledge management technology framework face daily operational failures (Goldfinch, 2007). These failures in the public sector result in fiscal failures such as insufficient revenues, reliance on borrowing, over-taxation, weak social policy, and the presence of an uncontrolled shadow economy (Tran et al, 2022).…”
Section: Knowledge Management and Fiscal Policymakingmentioning
confidence: 99%