Regulatory discretion and the unofficial economy: A redux

Ummad Mazhar ()

MPRA Paper from University Library of Munich, Germany

Abstract: This paper replicates the Johnson et al.’s (1998) empirical analysis of the affects of regulatory discretion on the unofficial economy. The narrow replication uses the data set of the original study which comprises of 49 countries for the year 1997. The wide replication is performed in two ways. Firstly, I investigate the original authors’ results using a larger data set of 162 countries and for a period from 1999 to 2007. Secondly, I use Arellano and Bond estimator to investigate the dynamics and causal effects. In both types of replications the results are similar to those in the original study. However, the estimates using Arellano and Bond estimator exhibit autocorrelation of order greater than 1 in the error term and are unable to pass the overidentifying restrictions test.

Keywords: Unofficial or Shadow economy; Corruption; Replication; Regulation; Arellano and Bond estimator; Panel Data (search for similar items in EconPapers)
JEL-codes: C23 C33 K20 L50 O17 (search for similar items in EconPapers)
Date: 2012-04
New Economics Papers: this item is included in nep-iue
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