Badariah Haji Din

Are Shadow Economy and Tourism Related? International Evidence

The present study attempts to investigate whether shadow economy and the tourism sector are related. In the European countries, Schneider reported that 20 to 25 per cent of the shadow economy is represented in the tourism-related industries – wholesale and retail, automotive and motorcycle sales and maintenance; transportation, storage and communications; and hotels and restaurants. For the tourism sector, the services given by operators (unregistered and/or underreporting) operate in the shadow economy will ultimately wiped off the map of high quality tourist destinations and destroyed the development of the tourism industry itself. This study examines the short-run and long-run relationships between international tourism receipts and shadow economy for 149 countries over the period 1995-2008. We use a generalized one-step error-correction model (ECM) in combination with a system Generalized Method of Moments (GMM) to explore the long-run relationship between these two variables. Our results suggest that tourism receipts and shadow economy are cointegrated. This implies that shadow economy and the tourism industry worldwide are related in the long-run. The long-run elasticities indicate a negative impact of the shadow economy on the tourism sector suggesting that increase in shadow economy activities will adversely affecting the tourism industry.

Tourism and biodiversity loss: Implications for business sustainability

The purpose of this study is to investigates the impact of tourism on biodiversity loss in a sample of 141 countries. In the analysis, we measure tourism using the numbers of international tourist arrivals, while biodiversity loss is proxy using the numbers of threatened species – birds, fishes, mammals and plants. We also include GDP per capita, population growth, protected areas, and crop production, which act as the control variables. We find that using robust standard error estimator the number of international tourist arrivals, population growth rate, protected areas and crop production increases the numbers of threatened species, while GDP per capita reduces the numbers of threatened species. One policy implication of this study is that since businesses in the tourism industry depend on the very existence of biodiversity, then biodiversity conservation should become the essential factor for business sustainability.

Good governance and crime rates in Malaysia

Purpose - – The purpose of this paper is to relate the quality of governance with crime in Malaysia. The study also identifies the best good governance tool to fight against crime in Malaysia. Design/methodology/approach - – The study uses time-series data on crime rates and six measures of governance: voice and accountability, political stability, government effectiveness, regulatory quality, rule of law and control of corruption. In this study the authors employed the popular autoregressive distributed lagged modeling approach to estimate the long-run model of crime and governance. Findings - – The authors test the hypothesis that good governance lowers crime rates (total crime, violent and property crimes). The results suggest a negative relationship between crime rates and good governance in Malaysia. This suggests that good governance reduces crime rates in Malaysia. Research limitations/implications - – The limitations of this study is the short time-series used in the analysis which is from 1996 to 2009. Practical implications - – This study provides evidence that the practice of good governance, for example, lower corruption, good policing and judicial system can mitigate crime in Malaysia. Social implications - – The implementation of good governance will protect property right of individuals, business sector and the society as a whole, and this will enhance prosperity of a nation. Originality/value - – This study provide the first empirical evidence that linking between crime and good governance in Malaysia.

Mitigating Shadow Economy Through Dual Banking Sector Development in Malaysia

Theory argues that as long as the shadow economy is of sufficient size, the leakage or loss of tax revenue through tax evasion will also be substantial. In this chapter, we provide new estimates of the size of the shadow economy in Malaysia for the period 1971–2013. Further, we relate the shadow economy to its determinants as measured by the misery index. This chapter reveals that the relationship between the shadow economy and financial development in Malaysia exhibits an inverted U-shaped curve. The chapter concludes that the Malaysian government should embark on programs that can reduce the size of the shadow economy, relying on its dual banking system of Islamic and conventional banks.