Institutional Determinants Of Shadow Economy In The Former Soviet Union Countries
Table 2: Estimation results: Determinants of the size of the shadow economy (% of the GDP)
| DepVar: Shadow Economy | OLS | |||||
| Eq. (1) | Eq. (2) | Eq. (3) | Eq. (4) | Eq. (5) | ||
| Government Intervention | 0.145*** | 0.109*** | 0.105*** | 0.099*** | 0.091*** | |
| (0.045) | (0.026) | (0.028) | (0.029) | (0.028) | ||
| Business Freedom | -0.131*** | -0.067*** | -0.067*** | -0.077*** | -0.065*** | |
| (0.030) | (0.023) | (0.024) | (0.024) | (0.023) | ||
| Trade Freedom | -0.066 | -0.029 | -0.022 | -0.029 | -0.019 | |
| (0.042) | (0.024) | (0.022) | (0.024) | (0.024) | ||
| Fiscal Freedom | -0.096** | - | - | - | - | |
| (0.036) | ||||||
| Control of Corruption | - | -2.658** | - | - | - | |
| (1.264) | ||||||
| Government Effectiveness | - | - | -2.217*** | - | - | |
| (0.816) | ||||||
| Regulatory Quality | - | - | - | 0.298 | - | |
| (0.851) | ||||||
| Rule of Law | - | - | - | - | -3.928*** | |
| (1.165) | ||||||
| Log(GDP per capita) | -0.0158 | -8.459*** | -8.249*** | -8.829*** | -8.114*** | |
| (0.499) | (0.862) | (0.838) | (0.913) | (0.859) | ||
| Unemployment | 0.148 | 0.252*** | 0.253*** | 0.257*** | 0.199** | |
| (0.101) | (0.090) | (0.091) | (0.093) | (0.088) | ||
| Economic Openness | -0.090*** | -0.034*** | -0.040*** | -0.033*** | -0.045*** | |
| (0.016) | (0.007) | (0.007) | (0.007) | (0.008) | ||
| Log(Gross capital formation) | -1.500*** | -0.721*** | -0.755*** | -0.606*** | -0.834*** | |
| (0.184) | (0.225) | (0.224) | (0.221) | (0.222) | ||
| Constant | 102.5*** | 140.4*** | 139.0*** | 144.0*** | 138.4*** | |
| (7.905) | (7.060) | (7.124) | (8.100) | (7.057) | ||
| Country Fixed Effects | No | Yes | Yes | Yes | Yes | |
| Observations | 154 | 133 | 133 | 133 | 133 | |
| R-squared | 0.685 | 0.951 | 0.952 | 0.949 | 0.955 | |
| Prob > F | 0.000 | 0.000 | 0.000 | 0.000 | 0.000 | |
| Breusch-Pagan test (Prob> chi2)a | 0.654 | 0.306 | 0.357 | 0.327 | 0.126 | |
| Ramsey RESET test (Prob > F)b | 0.140 | 0.386 | 0.244 | 0.023 | 0.094 | |
| Note: Robust standard errors in parentheses. Significance levels: *** p<0.01, ** p<0.05, * p<0.1. The parameter estimates of beta are reported. a) Breusch-Pagan test (Prob. > chi2) - H0: Constant variance (Homoscedastic). b) Ramsey RESET test (Prob. > F) - H0: Model has no omitted variables. | ||||||