Financial inclusion and underground economy nexus in West Africa: evidence from dynamic heterogeneous panel techniques

Musa Abdullahi Sakanko (), Joseph David, Nurudeen Abu and Awadh Ahmed Mohammed Gamal ()
Additional contact information
Musa Abdullahi Sakanko: University of Jos
Awadh Ahmed Mohammed Gamal: Sultan Idris Education University

Economic Change and Restructuring, 2024, vol. 57, issue 1, No 8, 20 pages

Abstract: Abstract We employ dynamic heterogeneous panel estimation techniques which include Dynamic Fixed Effects, Mean Group, and Pooled Mean Group estimators to explore the underground economy (UE) and financial inclusion (FI) relation for ten West African nations during the 2004–2021 period. Applying Pedroni cointegration test, the results present evidence of a long-term relation between UE and FI (alongside corruption, inflation rate, money supply, agricultural output, and trade). The results of panel estimation portray a long-term significant positive influence of FI on UE, but a short-term significant negative relation between FI and UE. In addition, corruption, money supply, and international trade have a long-term significant negative influence on UE, while inflation supports long-term expansion of UE. Also, a short-term significant negative relation exists between inflation (and trade) and UE, while a short-term significant positive relation is found between money supply and UE. The results of Dumitrescu–Hurlin causality test signal a one-way causality from FI to UE. Therefore, policies geared toward enhancing FI, reducing corruption and money supply, and improving international trade are recommended to reduce UE.

Keywords: Underground economy; Financial inclusion; PMG; West Africa (search for similar items in EconPapers)
JEL-codes: C23 G20 H30 N27 O17 (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://link.springer.com/10.1007/s10644-024-09589-x Abstract (text/html)
Access to the full text of the articles in this series is restricted.

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:kap:ecopln:v:57:y:2024:i:1:d:10.1007_s10644-024-09589-x

Ordering information: This journal article can be ordered from
http://www.springer. ... nt/journal/10644/PS2

DOI: 10.1007/s10644-024-09589-x

Access Statistics for this article

Economic Change and Restructuring is currently edited by George Hondroyiannis

More articles in Economic Change and Restructuring from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().