Warianty tytułu
Języki publikacji
Abstrakty
Aim/purpose - The underground economy is a major challenge across the world affecting both developed and developing economies. South Africa is no exception to this phenomenon and has lost billions of rands due to the underground economy. The aim of this study is to estimate the size of the underground economy in South Africa. Design/methodology/approach - The study used quarterly time series data from 2000 to 2020 and employed the Currency Demand Approach (CDA) for modeling the underground economy. Findings - The model results revealed that the underground economy is positively influenced by unemployment rate, tax burden, and social benefits granted by the government, however it is negatively influenced by Nominal Gross Domestic Product (NGDP), deposit interest rate, and self-employment rate. Furthermore, the study showed that there was a distinct growth of the underground economy, from 23.9% of GDP in 2003 to 34.5% of GDP in 2019. On average, the underground economy represented 28.8% of GDP for the period 2003 to 2020. Research implications/limitations - This model can be used in conjunction with other models to observe the trend in the South African underground economic activities. The South African government should take note of the spiraling growth of this economy and come up with measures to curb this growth to protect the formal economy. Originality/value/contribution - This study makes a significant contribution to the body of knowledge in this research area and provides much needed insights into the magnitude of the underground economy and the extent of tax evasion in South Africa. (original abstract)
Rocznik
Numer
Strony
64--95
Opis fizyczny
Twórcy
autor
- University of KwaZulu-Natal, South Africa
autor
- University of KwaZulu-Natal, South Africa
Bibliografia
- Abela, G., Gauci, T. M., & Rapa, N. (2021). An analysis of the shadow economy in Malta: A currency demand and MIMIC model approach. International Journal of Economics and Financial Issues, 12(1), 41-50. https://doi.org/10.32479/ijefi.11548
- Ahumada, H., Alvaredo, F., & Canavese, A. (2007). The monetary method and the size of the shadow economy: A critical assessment. Review of Income and Wealth, 53(2), 363-371. https://doi.org/10.1111/j.1475-4991.2007.00234.x
- Awad, I. M., & Alazzeh, W. (2020). Using currency demand to estimate the Palestine underground economy: An econometric analysis. Palgrave Communications, 6(1), 1-11. https://doi.org/10.1057/s41599-020-0433-4
- Bouriche, L., & Bennihi, A. S. (2020). Estimating the informal economy in Algeria from 1980 to 2019: Currency Demand Approach. Strategy and Development Review, 10(4), 471-490. https://search.emarefa.net/detail/BIM-995841
- BusinessTech. (2021). 3 top emigration destinations for South Africans - and how to get there. Lyttelton: Author. Retrieved from https://businesstech.co.za/news/wealth/ 498481/3-key-emigration-destinations-for-south-africans-and-how-to-get-there/
- Cagan, P. (1958). The demand for currency relative to the total money supply. Journal of Political Economy, 66, 302-328. https://doi.org/10.1086/258056
- Chelin, R., & Nyoni, R. (2020). Cheap and readily available illicit cigarettes are a lucrative source of income for organised criminals. Pretoria - Addis Ababa - Dakar: Institute for Security Studies. Retrieved from https://issafrica.org/iss- today/no-smoke-without-fire-south-africas-illicit-cigarette-trade
- CrunchEconometrix. (2018, May 30). (Stata13): VECM estimation, discussion and diagnostics
Typ dokumentu
Bibliografia
Identyfikatory
Identyfikator YADDA
bwmeta1.element.ekon-element-000171645288
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