SHADOW ECONOMY AND THE GROWTH OF THE NIGERIAN ECONOMY: THE CONTROLLING EFFECTS OF GOVERNMENT AND CORRUPTION
Abstract
This study examined the effect of shadow economy on the growth of the Nigerian economy. The specific objectives were to; evaluate the effect of MIMIC shadow economy on the gross domestic product growth rate in Nigeria; and evaluate the effect of MIMIC shadow economy on the gross domestic product growth rate in Nigeria. To meet the stated objectives, the study adopted the classical ordinary least squares (OLS) regression techniques as the method of estimation under the autoregressive distributed lag (ARDL) model. Findings from the study revealed that, in the long-run and short-run periods, the effect of the MIMIC shadow economy on economic growth in Nigeria is negative and non-significant Lastly, the result revealed that in the long-run and short-run periods, the effect of the DGE shadow economy on economic growth in Nigeria is positive and non-significant. Conclusively, the two approaches to shadow economy impacted the growth rate of the Nigerian economy differently. Specifically, the MIMIC approach was majorly negative while the DGE approach exerted mostly positive effect at both short-run and long-run periods, ceteris paribus.