Shadow Economy and Financial Sector Development in Malaysia

Volume: 6 Number: 7 October 1, 2016
  • Muzafar Shah Habibullah
  • Badariah H. Din
  • M. Yusof-saari
  • A. H. Baharom
International Journal of Economics and Financial Issues Cover
International Journal of Economics and Financial Issues
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Shadow Economy and Financial Sector Development in Malaysia

Abstract

This paper explores the link between the shadow economy and financial sector development in Malaysia for the period 1971-2013. We calculate the size of the shadow economy by using the modified-cash-deposits-ratio (MCDR) approach recently developed by Pickhardt and Sardia (2011). We investigate the contention made by Blackburn et al. (2012) that financial sector development can mitigate shadow economy – higher level of financial sector development lead to lower level of shadow economy. Our results show that there is a non-linear long-run relationship between shadow economy and financial sector development in Malaysia, an inverted-U shape curve, suggesting that at lower (higher) level of financial sector development commensurate with higher (lower) level of the shadow economy. One policy implication from this study is that the financial sector can play an important role in reducing shadow economy by improving the accessibility to financing and to the credit market.

Keywords

Details

Primary Language

English

Subjects

-

Journal Section

-

Authors

Muzafar Shah Habibullah This is me

Badariah H. Din This is me

M. Yusof-saari This is me

A. H. Baharom This is me

Publication Date

October 1, 2016

Submission Date

October 1, 2016

Acceptance Date

-

Published in Issue

Year 2016 Volume: 6 Number: 7

IZ

https://izlik.org/JA27HZ94LR

Cite

RIS / Bibtex
APA
Habibullah, M. S., Din, B. H., Yusof-saari, M., & Baharom, A. H. (2016). Shadow Economy and Financial Sector Development in Malaysia. International Journal of Economics and Financial Issues, 6(7), 181-185. https://izlik.org/JA27HZ94LR
AMA
1.Habibullah MS, Din BH, Yusof-saari M, Baharom AH. Shadow Economy and Financial Sector Development in Malaysia. IJEFI. 2016;6(7):181-185. https://izlik.org/JA27HZ94LR
Chicago
Habibullah, Muzafar Shah, Badariah H. Din, M. Yusof-saari, and A. H. Baharom. 2016. “Shadow Economy and Financial Sector Development in Malaysia”. International Journal of Economics and Financial Issues 6 (7): 181-85. https://izlik.org/JA27HZ94LR.
EndNote
Habibullah MS, Din BH, Yusof-saari M, Baharom AH (October 1, 2016) Shadow Economy and Financial Sector Development in Malaysia. International Journal of Economics and Financial Issues 6 7 181–185.
IEEE
[1]M. S. Habibullah, B. H. Din, M. Yusof-saari, and A. H. Baharom, “Shadow Economy and Financial Sector Development in Malaysia”, IJEFI, vol. 6, no. 7, pp. 181–185, Oct. 2016, [Online]. Available: https://izlik.org/JA27HZ94LR
ISNAD
Habibullah, Muzafar Shah - Din, Badariah H. - Yusof-saari, M. - Baharom, A. H. “Shadow Economy and Financial Sector Development in Malaysia”. International Journal of Economics and Financial Issues 6/7 (October 1, 2016): 181-185. https://izlik.org/JA27HZ94LR.
JAMA
1.Habibullah MS, Din BH, Yusof-saari M, Baharom AH. Shadow Economy and Financial Sector Development in Malaysia. IJEFI. 2016;6:181–185.
MLA
Habibullah, Muzafar Shah, et al. “Shadow Economy and Financial Sector Development in Malaysia”. International Journal of Economics and Financial Issues, vol. 6, no. 7, Oct. 2016, pp. 181-5, https://izlik.org/JA27HZ94LR.
Vancouver
1.Muzafar Shah Habibullah, Badariah H. Din, M. Yusof-saari, A. H. Baharom. Shadow Economy and Financial Sector Development in Malaysia. IJEFI [Internet]. 2016 Oct. 1;6(7):181-5. Available from: https://izlik.org/JA27HZ94LR