Document Type : Original Article
Authors
1 Department of Economics, Payame Noor University, Tehran, Iran
2 Senior expert of economic development and planning of Isfahan University, revenue expert of Shiraz Municipality, Iran
3 Faculty member of Kermanshah Payam Noor University
Abstract
The shadow economy is a response of the formal economy to high levels of government regulation and unfavorable economic conditions, which encourages individuals to engage in illegal activities. The tourism sector, with its potential for foreign exchange earnings, job creation, and wealth increase, serves as a significant driver for economic growth and can play a leading role in reducing poverty, especially in developing economies. Therefore, the effects of the International Tourism Index on the shadow economy have been specifically examined in 13 MENA countries and 18 G20 countries over the years 2007 to 2021. The estimates conducted in this research were analyzed using Stata 17 software and the panel data method. The results of the estimates indicate that, firstly, the development of the tourism industry in MENA countries significantly reduces underground economy activities, while it has no significant impact on G20 countries. On the other hand, the impact of tourism on the shadow economy in the case of cross-sectional effects is notable in most MENA countries, while in G20 countries, it has influenced the shadow economy of only five countries.
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