Informality and Bank Stability

Liu-Evans, Gareth ORCID: 0000-0002-5880-2781 and Mitra, Shalini ORCID: 0000-0001-5264-1983 (2019) Informality and Bank Stability. Economics Letters, 182. pp. 122-125.

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Abstract

While financial development (FD) has been widely studied in the literature as a determinant of informal sector size, there has been no focus on the role of financial stability. We find that the stability of the banking sector has a significant and robust negative effect on informality across countries. Using a recently available testing methodology based on a heteroskedasticity-robust Lasso we also find strong support for Rule of Law as a key determinant of informal sector size, and some evidence for the effect of FD.

Item Type:	Article
Uncontrolled Keywords:	Informality, Bank stability, Financial development, Rigorous lasso, Rule of law
Depositing User:	Symplectic Admin
Date Deposited:	18 Jun 2019 09:51
Last Modified:	19 Jan 2023 00:39
DOI:	10.1016/j.econlet.2019.06.012
Related URLs:	Author Publisher
URI:	https://livrepository.liverpool.ac.uk/id/eprint/3046250

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• Informality and Bank Stability. (deposited 12 Jun 2019 15:20)
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