Shadow Economy and Economic Growth in Romania. Cons and Pros

Zaman, Gheorghe; Goschin, Zizi

doi:10.1016/s2212-5671(15)00229-4

Cited by 35 publications

(28 citation statements)

References 23 publications

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“…Thus, corruption may be used as a way to obtain higher price of business opportunities. Zaman and Goschin (2015) highlighted that shadow economy, especially in corrupt countries, represents an important buffer for solving many problems such as high rate of unemployment, future usage of black money in the official economy, and local efficient use of public goods, based on market principles in situation in which goods are used by a limited number of beneficiaries (private/public local beneficiaries) who pay different and voluntary-based contributions. " In summary, this study is in support of the expectation that corruption and shadow economy would be more common in poorer countries.…”

Section: Hypothesis 1 the Higher Level Of Corruption Is Associated Wmentioning

confidence: 99%

Corruption, Shadow Economy and Economic Growth: An Empirical Survey Across the European Union Countries

Borlea

Achim

Miron

2017

Studia Universitatis „Vasile Goldis” Arad – Economics Series

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This study was carried out to empirically investigate the relationships between corruption and shadow economy among the European Union countries, over the period [2005][2006][2007][2008][2009][2010][2011][2012][2013][2014]. Moreover, since one would expect corruption and shadow economy to be more common in poorer countries, this study was therefore carried out to determine how corruption and shadow economy affect economic development. The empirical findings of this study confirm a high and positive relationship between corruption and shadow economy, therefore a higher level of corruption involves a higher level of shadow economy. Regarding the influence of corruption and shadow economy on economic growth, a high and negative relationship was found. This means that increasing corruption and shadow economy negatively affects economic growth.

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Section: Hypothesis 1 the Higher Level Of Corruption Is Associated Wmentioning

confidence: 99%

Corruption, Shadow Economy and Economic Growth: An Empirical Survey Across the European Union Countries

Borlea

Achim

Miron

2017

Studia Universitatis „Vasile Goldis” Arad – Economics Series

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show abstract

“…This is also the case of several countries such as China, Vietnam and Cambodia which face economic growth in spite of their lack of good governance [8][9][10]. In addition, there is evidence that the shadow economy, especially in corrupt countries, represents an important buffer for solving many economic problems [11].…”

Section: Introductionmentioning

confidence: 99%

The Impact of Corruption and Shadow Economy on the Economic and Sustainable Development. Do They “Sand the Wheels” or “Grease the Wheels”?

et al. 2020

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Having in mind the main debate “grease the wheels” vs. “sand the wheels”, the main objective of this study is to find the way in which corruption and shadow economy influence economic and sustainable development. A large cross-country database of 185 countries is used for the 2005–2015 time period. We find that corruption and shadow economy are poverty-driven diseases and they highly characterize low-income countries. Thus, the higher levels of corruption and shadow economy are correlated with low levels of economic and sustainable development. Then, the main contribution of this work consists of finding general and empirical evidence for the destructive role held by the corruption and shadow economy phenomena upon the economic and sustainable development of states. However, we also find some evidence that corruption can be also seen as a way to circumvent the law in order to achieve higher economic benefits and thereby to increase economic development. In addition, we find that economic and sustainable development in high-income countries is more strongly and negatively affected by the phenomena of corruption and shadow economy than in the case of low-income countries. Our research may have political implications for the government institutions that need to adopt the best-required policies, in order to boost economic and sustainable development. For low-income countries, we find some evidence for positive effects of corruption and shadow economy upon economic and sustainable development and the immediate practical implications are not to encourage but to effectively and strongly fight against these destructive phenomena and to find the proper channels to increase the institutional quality and to adopt the appropriate regulatory policies.

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“…Tax evasion was 4.2% in Poland, Czech Republic was 2.9% while in Germany it was 1.9%. Zaman and Goschin (2015) used synthetic index data of shadow economy in Romania from 1999 to 2012. In order to assess the impact of shadow economy on Romania's economic growth, the synthetic index was transformed into an econometric model and the statistical results showed a co-integration relationship which implied that shadow economy could have a long term consistent relationship with the formal economy.…”

Section: Empirical Reviewmentioning

confidence: 99%

“…Thus, shadow economy provides firms an opportunity to evade government strict regulations and have access to cheap labour and materials (Goel, Saunoris & Schneider, 2017). According to Zaman and Goschin (2015), underground economy has potential benefits and could be very visible especially where corruption exists in public administration, in addition to dishonest behavior of the policy makers and constant misuse of public funds. Therefore, informal economy involves all productive economic activities that would have been subject to tax and social contributions but are consciously hidden from the tax authorities due to tax burdens (Buehn, Dell'Anno & Schneider, 2012;Schneider & Williams, 2013).…”

Section: Introductionmentioning

confidence: 99%

The Financial and Economic Implications of Underground Economy: The Nigerian Perspective

Omodero¹

2019

Academic Journal of Interdisciplinary Studies

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The economic and financial effect of underground economy in all emerging countries is of tremendous concern. Sometimes due to the inputs of the sector to economic growth of nations, it is usually assumed that the government has nothing to lose, meanwhile it goes beyond the seemingly economic benefits, but provides an avenue whereby the government has to suffer financial losses through unavoidable and inherent tax evasions. This study evaluates the impact of shadow economy using the transaction approach and the MIMIC approach which helped to determine the size of the shadow economy as a percentage of GDP and the tax revenue losses suffered by the government for a period spanning from 1991 to 2018. Ordinary least squares method is used to examine the impact of tax revenue earned and lost on Nigeria’s GDP. The regression results indicate that tax revenue earned has a significant positive impact on economic growth, while the tax revenue loss has a significant negative influence on GDP. The study finds that underground economy activities do more harm to the government than good and is also detrimental to Nigeria’s economic progress. Therefore the suggestion among others is that the legal activities among them should be formalized and taxed while the unlawful ones should be exterminated.

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Shadow Economy and Economic Growth in Romania. Cons and Pros

Cited by 35 publications

References 23 publications

Corruption, Shadow Economy and Economic Growth: An Empirical Survey Across the European Union Countries

Corruption, Shadow Economy and Economic Growth: An Empirical Survey Across the European Union Countries

The Impact of Corruption and Shadow Economy on the Economic and Sustainable Development. Do They “Sand the Wheels” or “Grease the Wheels”?

The Financial and Economic Implications of Underground Economy: The Nigerian Perspective

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