Determinants of the informal economy of an emerging economy: a multiple indicator, multiple causes (MIMIC) approach

Date

2016-05-18

Advisors

Journal Title

Journal ISSN

ISSN

1476-1297

Volume Title

Publisher

Inderscience

Type

Article

Peer reviewed

Yes

Abstract

Positing the implementation of evidenced-based policies to manage the informal economy, our paper employs, in a novel way, the multiple-cause, multiple-indicator model and primary data, to identify the determinants of the Nigerian informal economy. Building on previous literature, relevant determinants of the informal economy were constructed from participants’ responses to questions designed to solicit such information. We found the factors responsible for the origin and expansion of the Nigerian informal economy to include: unemployment, a need to be autonomous/self-employed, corruption of government officials/agencies, participants’ desire to pay less tax, and participants’ need to survive. The greatest influence, in terms of magnitude and impacts, comes from the ‘participants’ need to survive’ factor, followed by corruption. Our policy recommendations follow these identified factors, and recognise the positive and important role played by the informal economy. Although country-specific, our findings/recommendations may be used to inform policy in other countries with similar economic structures as Nigeria.

Description

The file attached to this record is the author's final peer reviewed version. The Publisher's final version can be found by following the DOI link.

Keywords

emerging economies, informal economy, factors, corruption, government, tax, Nigeria, unemployment, economic structure

Citation

Igudia, E., Ackrill, R., Coleman, S., Dobson, C. (2016) Determinants of the informal economy of an emerging economy: a multiple indicator, multiple causes (MIMIC) approach. International Journal of Entrepreneurship and Small Business, 28 (2/3), pp.154-177.

Rights

Research Institute

Institute for Applied Economics and Social Value (IAESV)