1. Does public debt moderate government spending – informal economy nexus? Evidence from the Asian countries.
- Author
-
Tran Pham, Toan Khanh and Nguyen Le, Quyen Hoang Thuy To
- Subjects
INFORMAL sector ,PUBLIC debts ,PUBLIC spending ,ECONOMIC conditions in Asia ,LEAST squares - Abstract
Purpose: The purpose of this study is to explore the relationship between government spending, public debt and the informal economy. In addition, this paper investigates the moderating role of public debt in government spending and the informal economy nexus. Design/methodology/approach: By utilizing a data set spanning from 2000 to 2017 of 32 Asian economies, the study has employed the dynamic ordinary least squares (DOLS) and fully modified ordinary least squares (FMOLS). The study is also extended to consider the marginal effects of government spending on the informal economy at different degrees of public debt. Findings: The results indicate that an increase in government spending and public debt leads to an expansion of the informal economy in the region. Interestingly, the positive effect of government spending on the informal economy will increase with a rise in public debt. Originality/value: This study stresses the role of government spending and public debt on the informal economy in Asian nations. To the best of the authors' knowledge, this study pioneers to explore the moderating effect of public debt in the public spending-informal economy nexus. [ABSTRACT FROM AUTHOR]
- Published
- 2024
- Full Text
- View/download PDF