Globalisation versus Informality: Evidence from developing countries

Arbeitspapier

A number of theoretical studies have tended to trace the nature of globalization process' impacts (mostly characterised by trade opening) on informality, while relevant empirical literature has been not well developed. The paper aims to fill this knowledge gap by shedding further light on the linkages running from globalisation to informality in developing countries. Moreover, in this study, globalisation is characterised not only by trade integration but also by other globalisation aspects, such as social globalisation, financial globalisation and so forth. To achieve the main objective, we employ the Bayesian statistical techniques, which allow one to determine, from a large set of different globalization indicators, a subset of indicators most likely to influence the size of informality. Our finding reveals that the indicators with consistently high inclusion probabilities are trade integration, trade reforms, de jure financial openness and social globalisation. On the other hand, many covariates found significant in previous empirical studies are not robust to including in informality modelling.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: FIW Working Paper ; No. 74

Classification and Topics

• Classification: Wirtschaft ; Trade and Labor Market Interactions ; Open Economy Macroeconomics ; Formal and Informal Sectors; Shadow Economy; Institutional Arrangements ; Labor Force and Employment, Size, and Structure
• Subject: Globalisation ; Informality ; Bayesian Model Averaging ; Developing countries

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Hanh, PHAM Thi Hong
• Event: Veröffentlichung
• (who): FIW - Research Centre International Economics
• (where): Vienna
• (when): 2011

Further information

• Handle: http://hdl.handle.net/10419/121072
• Last update: 10.03.2025, 11:44 AM CET