The Impact of Economic Globalization on the Shadow Economy in Egypt

30 Pages Posted: 11 May 2017

See all articles by Mohammad Reza Farzanegan

Mohammad Reza Farzanegan

University of Marburg - Center for Near and Middle Eastern Studies (CNMS)

Mai Hassan

University of Marburg - Center for Near and Middle Eastern Studies (CNMS)

Date Written: April 06, 2017

Abstract

This study examines the economic globalization and the shadow economy nexus in Egypt. Using time series data from 1976 to 2013, the impulse response analysis shows that the response of the shadow economy in Egypt to positive shocks in economic globalization is negative and statistically significant for the first three years following the shock. This finding is obtained by controlling for several intermediary channels in globalization-shadow economy nexus such as education, government spending, industrial production, and labor force participation. Our results show the importance of promoting economic globalization by reducing the costs of doing business and trade in dealing with sizable shadow economy in Egypt.

Keywords: shadow economy, globalization, VAR model, impulse responses, Egypt

JEL Classification: C530, F150, F400, O530

Suggested Citation

Farzanegan, Mohammad Reza and Hassan, Mai, The Impact of Economic Globalization on the Shadow Economy in Egypt (April 06, 2017). Available at SSRN: https://ssrn.com/abstract=2965941 or http://dx.doi.org/10.2139/ssrn.2965941

Mohammad Reza Farzanegan (Contact Author)

University of Marburg - Center for Near and Middle Eastern Studies (CNMS) ( email )

Deutschhausstra├če 12
Marburg, 35037
Germany

HOME PAGE: http://www.uni-marburg.de/cnms/wirtschaft

Mai Hassan

University of Marburg - Center for Near and Middle Eastern Studies (CNMS) ( email )

Deutschhausstra├če 12
Marburg, 35037
Germany

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