Informality and bank stability

Gareth Liu-Evans () and Shalini Mitra

Economics Letters, 2019, vol. 182, issue C, 122-125

Abstract: While financial development (FD) has been widely studied in the literature as a determinant of informal sector size, there has been no focus on the role of financial stability. We find that the stability of the banking sector has a significant and robust negative effect on informality across countries. Using a recently available testing methodology based on a heteroskedasticity-robust Lasso we also find strong support for Rule of Law as a key determinant of informal sector size, and some evidence for the effect of FD.

Keywords: Informality; Bank stability; Financial development; Rigorous Lasso; Rule of Law (search for similar items in EconPapers)
JEL-codes: C5 E2 E6 G2 H1 H2 (search for similar items in EconPapers)
Date: 2019
References: Add references at CitEc
Citations: View citations in EconPapers (6)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0165176519302253
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:182:y:2019:i:c:p:122-125

DOI: 10.1016/j.econlet.2019.06.012

Access Statistics for this article

Economics Letters is currently edited by Economics Letters Editorial Office

More articles in Economics Letters from Elsevier
Bibliographic data for series maintained by Catherine Liu ().