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

Eghosa Igudia, Robert Ackrill, Simeon Coleman, Carlyn Dobson

Research output: Contribution to JournalArticle

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.
Original languageEnglish
JournalInternational Journal of Entrepreneurship and Small Business
Volume28
Issue number2/3
DOIs
Publication statusPublished - 10 May 2016

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Emerging economies
Informal economy
Factors
Corruption
Government
Tax
Nigeria
Unemployment
Economic structure

Keywords

  • Determinants of the informal economy
  • Nigeria
  • MIMIC approach
  • informal sector policies

Cite this

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Determinants of the informal economy of an emerging economy: a multiple indicator, multiple causes (MIMIC) approach. / Igudia, Eghosa; Ackrill, Robert; Coleman, Simeon; Dobson, Carlyn.

In: International Journal of Entrepreneurship and Small Business, Vol. 28, No. 2/3, 10.05.2016.

Research output: Contribution to JournalArticle

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