Premium
Corruption and the shadow economy at the regional level
Author(s) -
Gillanders Robert,
Parviainen Sinikka
Publication year - 2018
Publication title -
review of development economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.531
H-Index - 50
eISSN - 1467-9361
pISSN - 1363-6669
DOI - 10.1111/rode.12517
Subject(s) - shadow (psychology) , language change , obstacle , competitor analysis , sample (material) , economics , value (mathematics) , economy , business , market economy , political science , psychology , art , literature , management , chromatography , machine learning , computer science , law , psychotherapist , chemistry
The links between corruption and the shadow economy have mostly been studied empirically at the country level. This paper contributes to this literature by examining the relationship at the sub‐national level. We also add value to the existing literature in that we employ data capturing the extent to which the shadow economy and corruption are viewed as problems by firms as opposed to the standard measures of corruption and the size of the shadow economy. Using World Bank Enterprise Survey data, we find that sub‐national units in which more firms report that corruption is an obstacle to their operations also tend to have more firms that report that the practices of informal competitors are an obstacle and vice versa. Sub‐Saharan Africa is different in that neither of these findings is evident in that sub‐sample.