ICTs and the informal economy: mobile and broadband roles

2017 ◽  
Vol 19 (1) ◽  
pp. 58-76 ◽  
Author(s):  
Martha Garcia-Murillo ◽  
Jorge Andres Velez-Ospina
Keyword(s):  
Information And Communication Technologies ◽  
Informal Sector ◽  
Informal Economy ◽  
Policy Decision ◽  
Policy Implications ◽  
Formal Sector ◽  
Data Set ◽  
Content Type ◽  
Additional Tool ◽  
The Impact

Purpose The purpose of this paper is to explore whether information and communication technologies (ICTs) can move people from the informal to the formal sector. ICTs being multipurpose technologies can provide people with information about education, employment opportunities and government services that may potentially allow them to migrate to the formal sector. Design/methodology/approach The model includes variables that researchers have found to contribute to the growth of informality, such as the state of the economy, the impact of excessive taxes, the impact of regulation, the level of poverty and, of course, ICT metrics, specifically access to both cell phones and broadband as the main two mechanisms through which individuals in the informal sector can obtain information. The analysis relies on a multiple indicators and multiple causes statistical model, to evaluate the hard-to-measure informal economy. A panel data set of 170 countries covering a period of five years was used. Findings It was found that ICTs empower people, but such empowerment is not always positive for society. So, while mobile phones reduce transaction costs of informal business, this leads to their growth, as they are only a coordination technology. The empowerment that comes from broadband, meaning greater and deeper access to information and resources, can help reduce this sector of the economy and potentially improve these individuals’ lives as well. Research limitations/implications Measurement of the informal sector is a challenge to researchers precisely because it is hidden. This, like other work in this area, relies on estimates from indirect measures of the informal sector. The results are to be interpreted with caution. In addition, given that this research relies on country-level data, any specific policy decision will have to take particular circumstances into consideration to adapt these results to a specific context. Practical implications This study is important because of the more nuanced effect found between narrow and broadband technologies with respect to the informal economy and because of its policy implications. Given the results, governments should consider broadband as an additional tool to help individuals make the transition from the informal to the formal sector. Social implications Once an individual who works in the informal sector begins to realize the advantages of moving to the formal sector, it with the help of ICTs. This awareness could potentially lead to a slow but steady migration away from the informal economy that can improve the economic conditions of the population in these countries. Originality/value Scholars up to this point have been quite enthusiastic about the benefits of ICTs. In this paper, it was found that the effects are not always positive; a mobile does not help people move away from poverty and, in fact, supports the informal sector. It was found that only broadband can help these entrepreneurs move into the formal sector.

scholarly journals Informality and Economic Growth in Nigeria: 1980-2014

2017 ◽  
Vol 3 (3) ◽  
pp. 405 ◽  
Author(s):  
Mohammed Yelwa ◽  
A. J. Adam
Keyword(s):  
Economic Growth ◽  
Informal Sector ◽  
Informal Economy ◽  
Data Series ◽  
Formal Sector ◽  
Female Population ◽  
Demand Deposit ◽  
The Impact ◽  
Adf Test ◽  
The Relationship

<p><em>The paper examines the impact of informal sector activities on economic growth in Nigeria between 1980-2014. The contributions of informal sector activities to the growth of Nigerian economy cannot be over emphasized. It is the source of livelihood to the majority of poor, unskilled, socially marginalized and female population and is the vital means of survival for the people in the country lacking proper safety nets and unemployment insurance especially those lacking skills from formal sector jobs. The relationship between informality and economic growth is not clear because the sector is not regulated by the law also there is no concrete evidence that this sector enhances growth because the sector’s contributions to growth is not measured. The use of endogenous growth model becomes relevant in this study. The theory emphasizes the role of production on the long-run via a higher rate of technological innovation. The variables that were tested are official economy nominal GDP, informal economy nominal GDP, currency in circulation, demand deposit, ratio of currency in circulation to demand deposit, narrow money, informal economy as percentage of official economy. ADF test was conducted to establish that the data series of all variables are stationary t levels. Having established the stationarity test we also, conducted causality test of the response of official economy nominal GDP to informal economy nominal GDP. In conclusion, the impact of informal sector economy on economic growth in Nigeria is quiet commendable. Even though, the relationship between informality and economic growth is not straight. The paper recommended thus, the need for the government to integrate the activities of the informal economy into formal sector and size of the sector is measured and regulated because their roles are commendable. As it will improve tax collection and enhance fiscal policy.</em></p>

Expanding East African tax base will face resistance

2016 ◽  
Keyword(s):  
Informal Sector ◽  
Informal Economy ◽  
Essential Role ◽  
Budget Deficits ◽  
Formal Sector ◽  
East African ◽  
Efficient Manner ◽  
Tax Base ◽  
Member States ◽  
Content Type

Significance Member states' national budgets include plans to increase taxation of the informal economy. Governments have several reasons for broadening tax bases: budget deficits, increasing debts, donor dependency, declining revenue from the formal sector and a desire to improve services and infrastructure. Impacts Limited state resources will hinder attempts to formalise economies through enforcement alone. Incentives will play an essential role in any attempt to expand the tax base. Unless implemented in an efficient manner, taxation of the informal economy could drain government funds and hurt informal businesses. Successful taxation of the informal sector will fail unless businesses see returns in services or infrastructure.

scholarly journals Formal Female Entrepreneurship and the Shadow Economy

2021 ◽  
Vol 13 (5(J)) ◽  
pp. 63-72
Author(s):  
Cassandra E. DiRienzo ◽  
Jayoti Das
Keyword(s):  
Informal Sector ◽  
Informal Economy ◽  
Business Models ◽  
Primary Objective ◽  
National Accounts ◽  
Formal Sector ◽  
Female Entrepreneurship ◽  
Data Set ◽  
Formal Economy ◽  
Barrier To Entry

Although female entrepreneurship yields products, markets, and business models that might not exist otherwise and are relevant to economic growth and development as well as issues related to gender equality, the factors that drive female entrepreneurship is largely understudied. The primary objective of this study is to examine the relationship between the size of a country’s informal sector and the prevalence of female entrepreneurship in the formal economy. This relationship is empirically tested using a regression analysis that employs a cross-country data set of 70 countries. The analysis results indicate a significant inverse relationship between the size of the informal sector and the prevalence of formal sector female entrepreneurship. It is argued that a larger informal economy implies a greater number of women working in the informal sector due to discriminatory barriers to the formal economy. Both formal sector entrepreneurship and work in the informal economy can lessen the barrier to entry women face related to work-life balance by allowing greater flexibility in work hours; however, employment in the informal sector is a relatively poor substitute to formal sector employment as informal sector work does not include benefits, nor is it taxed or included in official statistics. Policy recommendations for encouraging formal female entrepreneurship are made. Promoting female entrepreneurship in the formal sector not only helps to close gender, inequality gaps, but also serves to improve tax systems, lessen distortions in national accounts and official indicators, and improve the provision of public goods.

To list or not to list, that is the question: new evidence from the performance of Vietnamese commercial banks

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Tuan Quoc Le ◽  
Ha Ngan Duong ◽  
Phuong Thanh Nguyen
Keyword(s):  
Initial Public Offering ◽  
Financial Institutions ◽  
Commercial Banks ◽  
Positive Impact ◽  
Policy Implications ◽  
Bank Performance ◽  
Data Set ◽  
Going Public ◽  
Content Type ◽  
The Impact

Purpose This paper aims to investigate the decisions of listing for Vietnamese banks and the impact of listing on bank performance. Design/methodology/approach A longitudinal data set of 30 commercial banks in the period of 2006–2018 with various univariate and multivariate tests is used. Findings This study found that listing is positively associated with bank profitability. The results are consistent even after the control for potential endogeneity problems by propensity score matching methodology and Heckman selection bias models. Further analysis suggests some new alternative channels for the positive impact, namely, the increased quality of information disclosure, technological development and income diversification of commercial banks after listing. Practical implications Hence, this paper provides recommendations and policy implications for regulatory bodies regarding the listing of commercial banks in Vietnam. Originality/value The contributions to the literature are three-folds. First, this study contributes to a strand of literature on the impact of going public [initial public offering (IPO)/listing] of financial institutions on their performance. While the literature on non-financial firm performance post-going public is ample, few have directly considered the IPO/listing of banks and other financial institutions. Second, in further looking at the impact of listing on bank performance, this study also sheds some light on the new possible channels of the effect and provides evidence of new channels. Then, last but not least, the case of Vietnam could possibly yield interesting results for a transitory stock market. From the evidence, the recommendations and policy implications for a listing of Vietnamese banks are provided.

Loan tenor in project finance

2019 ◽  
Vol 12 (3) ◽  
pp. 825-842 ◽  
Author(s):  
Wouter Thierie ◽  
Lieven De Moor
Keyword(s):  
Political Risk ◽  
Bank Lending ◽  
Bank Loans ◽  
Policy Implications ◽  
Project Finance ◽  
Basel Iii ◽  
Infrastructure Projects ◽  
Data Set ◽  
Content Type ◽  
The Impact

Purpose The purpose of this paper is to develop a better understanding of the debt structuring of project finance (PF) loans and the main drivers affecting the maturity of bank loans in infrastructure deals. When banks grant loans to a project, they have two decision variables: the interest margin or the spread and the maturity of the loan. Although several studies analyze the drivers of the spread, few studies in the literature look at the maturity of bank loans. As infrastructure projects are typically highly leveraged, the structuring of bank lending is an important parameter in the financial viability of the project. Design/methodology/approach The paper develops a regression analysis of the loan’s maturity on four categories: characteristics of the project, political risk of the country where the project is executed, the macro-economic setting and the regulatory framework. By using a new data set of InfraDeals containing data on bank loans of more than 1,800 infrastructure projects worldwide from 1997 to 2016, this paper reveals new insights on the debt structuring of banks for PF loans. Findings The results indicate that the maturity of bank loans granted to infrastructure deals is predominantly driven by political risk and regulation, rather than the structuring of the project. This implicates that the region where the deal is closed weighs more heavily than the specificities of the project itself. Originality/value The results have important policy implications. The paper allows to develop a better understanding on how political risk and new regulation, like Basel III, might affect the PF market. The paper is the first one finding empirical evidence of the impact of Basel III regulation on PF lending. By delving deeper into the political risk variable, the authors formulate several recommendations to mitigate political risk.

scholarly journals EVALUATING THE IMPACT OF INFORMAL SECTOR COMPETITION ON FIRM PERFORMANCE: SOME LESSONS FROM SOUTH-EAST EUROPE

2018 ◽  
Vol 23 (04) ◽  
pp. 1850025 ◽  
Author(s):  
COLIN C. WILLIAMS ◽  
SLAVKO BEZEREDI
Keyword(s):  
Firm Performance ◽  
Informal Sector ◽  
Informal Economy ◽  
Negative Impact ◽  
Policy Implications ◽  
East Europe ◽  
South East Europe ◽  
The Impact ◽  
The Relationship ◽  
Do So

A widespread assumption is that competition from the informal sector has a negative impact on the firm performance of legitimate enterprises. This is because of the unfair competition they face from such enterprises in the informal sector. The aim of this paper is to provide an evidence-based evaluation of whether this is the case based on an analysis of the relationship between the firm performance of enterprises and their perception of the prevalence of informal sector competition. To do so, data is reported from a representative sample of 1,430 enterprises in Bulgaria, Croatia and FYR Macedonia. The finding is that enterprises asserting that their competitors participate in the informal economy have significantly lower real annual sales growth rates compared with those who assert that their competitors do not participate in the informal economy. The theoretical and policy implications are then discussed.

Natural disasters and their policy implications for business schools

2018 ◽  
Vol 10 (1) ◽  
pp. 100-114
Author(s):  
Kevin Wynne ◽  
Douglas Leary ◽  
Jay Sholes
Keyword(s):  
College Students ◽  
Natural Disasters ◽  
Business Schools ◽  
Principal Component ◽  
Hurricane Sandy ◽  
Policy Implications ◽  
Data Set ◽  
Content Type ◽  
Empirical Results ◽  
The Impact

Purpose The purpose of this paper is to analyze the impact of Hurricane Sandy and a series of snowstorms that affects two universities in the northeast. Design/methodology/approach A survey instrument was used to assess the educational impact that these storms had on the college students at two AACSB business schools located in the New York City area. Utilizing 519 observations from Hurricane Sandy in 2012 and 441 observations from the snowstorms in the Spring of 2015, the paper is able to document the impact these natural disasters had on the college students in a few selected areas. The paper conducts univariate t-statistics for mean differences, principal component analysis determining eigenvalues, and a multivariate logit model using log likelihood functions. Findings The empirical results illustrate that the two different events had different impacts upon the students. In addition, the events in certain circumstances had different impacts upon the student responses between the two universities. Students perceived an increase in preparation by the faculty more significantly when make-up classes were conducted in classrooms as opposed to additional online work. Dorm residents at the suburban university felt greater financial hardship than their counterpart dorm residents at the urban university. Commuter students overall felt an increase in concerns related to their overall education. Originality/value The empirical results are robust to multiple specifications, and the authors are able to identify the predominate factors that affected the students during the two natural disasters. The unique survey based nature of the data set provides valuable insights into the students’ behavior that has not previously been documented.

Money Multiplier Bias Due to Informal Sector: An Extension of the Existing Money Multiplier

2021 ◽  
pp. 227797872097988
Author(s):  
Khurrum S. Mughal ◽  
Friedrich G. Schneider ◽  
Faheem Aslam ◽  
Alishba Tahir
Keyword(s):  
Money Supply ◽  
Informal Sector ◽  
Informal Economy ◽  
Economic Policies ◽  
Official Statistics ◽  
Jel Codes ◽  
Money Multiplier ◽  
Multiplier Effect ◽  
The Impact

To demonstrate the impact of informal economy on the official money multiplier in currency supply, we present an extension of the basic money multiplier model. The influence of economic policies may differ if they are based only on official statistics without considering the informal sector. Since most of the activities in informal sector are hidden from authorities, it is widely assumed that these activities are based on cash transactions, a part of total currency that cannot be attracted towards deposits due to the holder’s fear of prosecution and taxation, etc. Therefore, it is expected that such currency holdings can give biased results by playing a role in the money multiplier, a phenomenon that is usually ignored while attempting to alter money supply. The article also indicates that because of informal sector, the currency deposit ratio in the money multiplier is smaller than expected (depending on size of the informal sector), leading to a larger multiplier effect. JEL Codes: E26, E51, O17

The Psychological and Financial Impact of Cybercrime Victimization: A Novel Application of the Shattered Assumptions Theory

2021 ◽  
pp. 089443932098382
Author(s):  
Jildau Borwell ◽  
Jurjen Jansen ◽  
Wouter Stol
Keyword(s):  
Negative Impact ◽  
Secondary Analysis ◽  
Well Being ◽  
Policy Implications ◽  
Financial Impact ◽  
Financial Loss ◽  
Data Set ◽  
Loss Compensation ◽  
Shattered Assumptions ◽  
The Impact

While criminality is digitizing, a theory-based understanding of the impact of cybercrime on victims is lacking. Therefore, this study addresses the psychological and financial impact of cybercrime on victims, applying the shattered assumptions theory (SAT) to predict that impact. A secondary analysis was performed on a representative data set of Dutch citizens ( N = 33,702), exploring the psychological and financial impact for different groups of cybercrime victims. The results showed a higher negative impact on emotional well-being for victims of person-centered cybercrime, victims for whom the offender was an acquaintance, and victims whose financial loss was not compensated and a lower negative impact on emotional well-being for victims with a higher income. The study led to novel scientific insights and showed the applicability of the SAT for developing hypotheses about cybercrime victimization impact. In this study, most hypotheses had to be rejected, leading to the conclusion that more work has to be done to test the applicability of the SAT in the field of cybercrime. Furthermore, policy implications were identified considering the prioritization of and approach to specific cybercrimes, treatment of victims, and financial loss compensation.

Increasing revenue and attendance in Canadian Baptist churches

2015 ◽  
Vol 42 (12) ◽  
pp. 1071-1089
Author(s):  
Alan Chan ◽  
Bruce G. Fawcett ◽  
Shu-Kam Lee
Keyword(s):  
Church Health ◽  
Eastern Canada ◽  
Data Set ◽  
Content Type ◽  
Factors Affecting ◽  
Scarce Resources ◽  
Baptist Churches ◽  
And Performance ◽  
The Impact ◽  
Simulation Exercises

Purpose – Church giving and attendance are two important indicators of church health and performance. In the literature, they are usually understood to be simultaneously determined. The purpose of this paper is to estimate if there a sustainable church congregation size using Wintrobe’s (1998) dictatorship model. The authors want to examine the impact of youth and adult ministry as well. Design/methodology/approach – Using the data collected from among Canadian Baptist churches in Eastern Canada, this study investigates the factors affecting the level of the two indicators by the panel-instrumental variable technique. Applying Wintrobe’s (1998) political economy model on dictatorship, the equilibrium level of worship attendance and giving is predicted. Findings – Through various simulation exercises, the actual church congregation sizes is approximately 50 percent of the predicted value, implying inefficiency and misallocation of church resources. The paper concludes with insights on effective ways church leaders can allocate scarce resources to promote growth within churches. Originality/value – The authors are the only researchers getting the permission from the Atlantic Canada Baptist Convention to use their mega data set on church giving and congregation sizes as per the authors’ knowledge. The authors are also applying a theoretical model on dictatorship to religious/not for profits organizations.

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