1. Shadow economy implications of financial development in Africa: Do income groups also matter?
- Author
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Ridwan, Lanre Ibrahim, Ajide, Kazeem Bello, Cifuentes-Faura, Javier, and Al-Faryan, Mamdouh Abdulaziz Saleh
- Subjects
- *
INFORMAL sector , *LOW-income countries , *FINANCIAL markets - Abstract
This study explores the link between financial development and the shadow economy in 45 African economies from 1991 to 2019. While overall financial indices show no clear impact on the shadow economy across the entire sample, a nuanced pattern emerges when considering income groups. In low-income countries, financial institutions' index significantly amplify the shadow economy, whereas in lower middle-income nations, broader financial market measures independently contribute to its expansion. This reveals a heterogeneous relationship between financial development and the shadow economy in Africa, emphasizing the income-specific dynamics influencing these interactions. • There is a heterogeneous relationship between financial development and shadow economy. • The income-specific dynamics influencing these interactions. • Financial development indices exert no discernible impacts on the shadow economy. • In low-income countries, financial institutions' index amplify the shadow economy. • In lower middle-income nations, financial market measures contribute to its expansion. [ABSTRACT FROM AUTHOR]
- Published
- 2024
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