Document Type : Original Article

Authors

1 lish Faculty member of Azad University

2 Member of the faculty of pnu University

10.22067/erd.2024.86378.1220

Abstract

Past literature has confirmed the negative effects of economic uncertainty on production, investment, and employment. However, very limited studies consider the impact of economic uncertainty and banking concentration on the informal sectors. This study examines the effects of economic uncertainty on the shadow economy with the moderating role of banking concentration as an indicator of the financial sector. For this purpose, data were collected from a sample of 20 MENA member countries during the period 1991 to 2020. The GMM method has been used to estimate the research models. The results show that economic uncertainty has a positive effect on the size of the shadow economy and this effect is statistically confirmed at the 95% confidence level. The results also show that banking concentration has a significant effect on the relationship between economic uncertainty and the shadow economy. So that high banking concentration intensifies the positive effect of economic uncertainty on the size of the shadow economy.

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