Smuggling and the Black Market Premium

Bahmani‐Oskooee, Mohsen; Goswami, Gour Gobinda

Smuggling and the Black Market Premium

Bahmani-Oskooee, M. and Goswami, G. G. (2003). "Smuggling and the Black Market Premium", Scientific Journal of Administrative Development, 1(1), 95-111.

18 Pages Posted: 25 Jul 2020

See all articles by Mohsen Bahmani‐Oskooee

Mohsen Bahmani‐Oskooee

University of Wisconsin - Milwaukee - Center for Research on International Economics

Gour Gobinda Goswami

North South University

Date Written: 2003

Abstract

Empirical studies pertaining to the impact of smuggling on the black mar-ket premium (BMP) are very rare in the literature. This paper adds to the literature on the relation between smuggling and the black market premium in the foreign exchange market by pooling data from 70 countries over the period 1956-98 in an unbalanced panel framework. Using tariff as a proxy for smuggling into a country and controlling for other macroeconomic variables, our results strongly support the notion that smuggling leads to high BMPin the foreign exchange market supporting the theoretical literature.

Keywords: Black Market Premium, Smuggling, Tarif

JEL Classification: F31

Suggested Citation: Suggested Citation

Bahmani-Oskooee, Mohsen and Goswami, Gour Gobinda, Smuggling and the Black Market Premium (2003). Bahmani-Oskooee, M. and Goswami, G. G. (2003). "Smuggling and the Black Market Premium", Scientific Journal of Administrative Development, 1(1), 95-111., Available at SSRN: https://ssrn.com/abstract=3575498