Do financial development and institutional quality impede or stimulate the shadow economy? A comparative analysis of developed and developing countries
Abstract Financial development (FD) and institutional quality (IQ) shape the invisible informal economies. This study conducts an empirical analysis of how financial development (FD) and institutional quality (IQ) impact the hidden shadow economy, with a particular focus on the differences between d...
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| Format: | Article |
| Language: | English |
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Springer Nature
2025-01-01
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| Series: | Humanities & Social Sciences Communications |
| Online Access: | https://doi.org/10.1057/s41599-024-04347-w |
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| author | Waqar Ameer Kazi Sohag Qilin Zhan Syed Hasanat Shah Zhang Yongjia |
| author_facet | Waqar Ameer Kazi Sohag Qilin Zhan Syed Hasanat Shah Zhang Yongjia |
| author_sort | Waqar Ameer |
| collection | DOAJ |
| description | Abstract Financial development (FD) and institutional quality (IQ) shape the invisible informal economies. This study conducts an empirical analysis of how financial development (FD) and institutional quality (IQ) impact the hidden shadow economy, with a particular focus on the differences between developed and developing countries. Using the CS-ARDL estimation technique, the findings reveal that FD and improved IQ significantly reduce the shadow economy in developing countries while these factors fuel the growth of the underground economy in developed nations. The study also illustrates that in developing nations, a synergy between economic growth, enhanced IQ, and advanced FD effectively contributes to shrinking the shadow economy. These empirical insights offer valuable policy implications, suggesting that adaptive strategies considering the stage of financial development and institutional quality can effectively mitigate the impact of the shadow economy. |
| format | Article |
| id | doaj-art-579b6bbf7ef940118675b31e154c5017 |
| institution | Kabale University |
| issn | 2662-9992 |
| language | English |
| publishDate | 2025-01-01 |
| publisher | Springer Nature |
| record_format | Article |
| series | Humanities & Social Sciences Communications |
| spelling | doaj-art-579b6bbf7ef940118675b31e154c50172025-01-05T12:11:46ZengSpringer NatureHumanities & Social Sciences Communications2662-99922025-01-0112111110.1057/s41599-024-04347-wDo financial development and institutional quality impede or stimulate the shadow economy? A comparative analysis of developed and developing countriesWaqar Ameer0Kazi Sohag1Qilin Zhan2Syed Hasanat Shah3Zhang Yongjia4School of Economics, Shandong Technology and Business UniversityGraduate School of Economics and Management, Ural Federal UniversitySchool of Finance and Trade, Liaoning UniversitySchool of Economics Jilin University China and Sino-Japanese Joint Center of Economic Research Jilin UniversityInstitute of Advanced Studies, University of MalayaAbstract Financial development (FD) and institutional quality (IQ) shape the invisible informal economies. This study conducts an empirical analysis of how financial development (FD) and institutional quality (IQ) impact the hidden shadow economy, with a particular focus on the differences between developed and developing countries. Using the CS-ARDL estimation technique, the findings reveal that FD and improved IQ significantly reduce the shadow economy in developing countries while these factors fuel the growth of the underground economy in developed nations. The study also illustrates that in developing nations, a synergy between economic growth, enhanced IQ, and advanced FD effectively contributes to shrinking the shadow economy. These empirical insights offer valuable policy implications, suggesting that adaptive strategies considering the stage of financial development and institutional quality can effectively mitigate the impact of the shadow economy.https://doi.org/10.1057/s41599-024-04347-w |
| spellingShingle | Waqar Ameer Kazi Sohag Qilin Zhan Syed Hasanat Shah Zhang Yongjia Do financial development and institutional quality impede or stimulate the shadow economy? A comparative analysis of developed and developing countries Humanities & Social Sciences Communications |
| title | Do financial development and institutional quality impede or stimulate the shadow economy? A comparative analysis of developed and developing countries |
| title_full | Do financial development and institutional quality impede or stimulate the shadow economy? A comparative analysis of developed and developing countries |
| title_fullStr | Do financial development and institutional quality impede or stimulate the shadow economy? A comparative analysis of developed and developing countries |
| title_full_unstemmed | Do financial development and institutional quality impede or stimulate the shadow economy? A comparative analysis of developed and developing countries |
| title_short | Do financial development and institutional quality impede or stimulate the shadow economy? A comparative analysis of developed and developing countries |
| title_sort | do financial development and institutional quality impede or stimulate the shadow economy a comparative analysis of developed and developing countries |
| url | https://doi.org/10.1057/s41599-024-04347-w |
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