Effects of Foreign Direct Investment and Quality of Informal Institution on the Size of the Shadow Economy: Application to Vietnam

• 발행기관: 한국유통과학회
• 저자명: Bui Hoang NGOC
• 간행물 정보: 『The Journal of Asian Finance, Economics and Business(JAFEB)』Vol. 7 No.5, 73~80쪽, 전체 8쪽
• 주제분류: 경제경영 > 경제학
• 파일형태: PDF
• 발행일자: 2020.05.30

영문 초록

Tax is the main revenue of Government, so fighting tax evasion and sustainable growth have been the primary macroeconomic goals being pursued by every developing country, Vietnam included. The existence and development of the shadow economic sector are synonymous with the national budget losing out. In Vietnam, foreign direct investment projects do not promote economic growth and is also a sector that gives way to tax evasion.The purpose of this study is to investigate the impact of foreign direct investment, the quality of the informal institution on the size of the shadow economy in Vietnam, during the period 1991-2015. By applying the Autoregressive Distributed Lag approach and Toda and Yamamoto test, we found evidence to conclude that the quality of the informal institution harms the size of the shadow economy. The results of the causality test show that there is a unidirectional causality running from the shadow economy and the quality of the informal institution to foreign direct investment attraction in Vietnam. Political solutions need to be implemented carefully to counter the harmful effects of the shadow economy. Policymakers should adopt several economic policies to improve the ‘human capital’ and drive the shadow economy into the formal economy.

목차

1. Introduction

2. Theoretical Background and Literature Review

3. Data and Methodology

4. Empirical Results and Discussion

5. Conclusions and Policy Implications

References

키워드

Shadow Economy Quality of Institution ARDL Vietnam