Impact of Shadow Economy on Sustainable Development in Africa

ABSTRACT

This study contributes to the sustainable development literature by investigating the impact of the shadow economy on sustainable development in a panel of 30 African countries over a period of 2000–2017. The study employs parametric and nonparametric panel estimation techniques. The novel moment panel quantile regression method is also used to produce robust outcomes across the distribution of the explained variable in the presence of location shifters, scale variants, endogeneity, and outliers. The results reveal that the shadow economy reduces sustainable development in Africa. The study concludes that conscious efforts are needed to ensure that the shadow economy issue is addressed to enjoy the benefits of sustainable development in the African region.

KEYWORDS:

• Shadow economy
• sustainable development
• panel quantile estimation
• Africa

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

1. For details on shadow economy see Dell’Anno (2021) and Ajide et al. (2022).