Illegal Trade in the Iranian Economy: Evidence from a Structural Model
By Mohammad Reza Farzanegan. Social Science Research Network, 2009
137 citations recorded by the source corpus.
This study investigates the main causes and consequences of import and export smuggling and estimates the relative index of smuggling in Iran from 1970 to 2002. The Multiple Indicators - Multiple Causes (MIMIC) econometric modelling is used for a comprehensive analysis of the latent variable of smuggling. The main results of this paper indicate that the rate of fine for smuggling and the general level of education reduce smuggling, while the tariff burden increases the incentives for illegal trade. More trade openness accompanies more illegal trade for the case of Iran. On average, the relative size of smuggling is about 13% of the total trade in Iran. The absolute amount of smuggling per year is about $3 billion.
Subfields: Economics and Econometrics, Sociology and Political Science
View Paper: https://www.semanticscholar.org/paper/85252574c9c04a977d2272e8bd9b483f0946aeed
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Citations in the corpus
- Pollution, Shadow Economy and Corruption: Theory and Evidence (2012, methodology): “17 MIMIC models have also been applied to special facets of the shadow economy, such as smuggling (e.g., Farzanegan, 2009; Buehn and Farzanegan, 2012).”
- Size and Development of the Shadow Economies of 157 Countries Worldwide: Updated and New Measures from 1999 to 2013 (2016, unknown): “Following them, various scholars like Tafenau et al. (2010); Tedds (2005); Schneider et al. (2010); Dell’Anno (2007); Hassan and Schneider (2016), Buehn and Farzanegan (2012), Farzanegan (2009); Chaudhuri et al. (2006) applied the MIMIC model to measure the size of the shadow economy.”