Aziz N. Berdiev

Exploring the dynamics of the shadow economy across US states

This article examines the dynamics of the shadow economy using data for 50 US states over the period 1998–2008. Using a panel VAR model, we analyse the impulse response of the shadow economy to an orthogonal shock in capital tax rates, educational attainment, union participation and gross state product. We find evidence of significant dynamics underlying the relationship between the shadow economy and its determinants. The results remain robust to alternate measures of the determinants of the shadow economy, alternate causal ordering of the variables in the system and conditioning on the level of income in each state.

Do natural disasters increase the likelihood that a government is replaced

We examine the impact of natural disasters on the likelihood that a government is removed from office using panel data for 156 countries over the period 1975–2010. Employing a conditional logit model, we find that the occurrence of natural disasters, the number of natural disasters and disaster-related losses increase the chances that a government will be replaced. The magnitudes of these effects differ widely across natural disaster types, but are robust to the inclusion of economic and political variables and to model specifications. Overall, these findings are consistent across our sample of OECD and non-OECD countries.

Does globalisation affect the shadow economy

We investigate the impact of globalisation on the shadow economy using panel data for 119 countries. Our evidence suggests that globalisation matters in mitigating shadow development. More specifically, we find that political globalisation reduces the shadow economy, whereas economic and social globalisations have limited statistical support after controlling for important factors that affect the size of the shadow economy. Overall, these results are robust after accounting for an alternative measure of the shadow economy, outliers, endogeneity and alternative model specifications.

Corruption and the shadow economy: One-way or two-way street?

This paper attempts to bring some resolution to the relation between corruption and the shadow economy. While previous research focuses on the static relationship between the two, we account for dynamics using a panel vector autoregression model and consider influences from the official economy and institutional quality. Using cross‐national panel data for 108 countries over the period 1984–2006, results show a bidirectional relationship with initial complementarity, and substitution over time. Thus, the nature of the two‐way street is shown to change over time and our consideration of dynamics reveals the complementarity–substitution switch.

What drives entrepreneurs underground? The role of tax morale

ABSTRACT Using novel cross-country data, we examine whether and to what extent tax morale impacts informal entrepreneurship. Employing instrumental variables strategy, we find that countries with higher tax morale enjoy lower informal entrepreneurship.

How Synchronized Is China with the Other Asia-Pacific Countries?

We investigate the synchronization of growth cycles between China and 11 Asia-Pacific countries using quarterly data for the period 1993:2-2012:4. We employ a wavelet-based measure of comovement to examine the degree of business cycle synchronization in the time-frequency framework. While we find that the growth cycles of China is synchronized with the other Asia-Pacific economies, the strength of business cycle synchronization fluctuates significantly across time and frequencies. Our results also illustrate that the degree of comovement between the growth cycles varies across different country pairs in our time-frequency analysis. Overall, we find that the strength of business cycle synchronization between China and other Asia-Pacific countries has increased at long-run fluctuations, especially during and following the recent global financial crisis. We also observe a relatively low degree of comovement between the growth cycles of China and most Asia-Pacific economies almost at all frequencies during the Asian financial crisis. We thus emphasize the importance of examining the strength of business cycle synchronization in the time-frequency domain.