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Shedding Light on the Shadow Economy: A Nighttime Light Approach

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  • Kiyoyasu Tanaka
  • Souknilanh Keola

Abstract

Measuring the shadow economy is inherently difficult, but critical for understanding economic development. Using census data on formal and informal sectors in Cambodia, we document that 96.6 per cent of non-farm establishments do not formally register with the government, and their sales accounted for 76.6 per cent of total sales in 2011. Estimating their past sales from changes in nighttime light for 1993–2010, we find that both formal and informal firms increased their estimated sales. The share of informal sales increased from 68.8 per cent in 1993 to 76.6 per cent in 2011, suggesting that the informal sector increased quantitatively in both absolute and relative terms over time.

Suggested Citation

  • Kiyoyasu Tanaka & Souknilanh Keola, 2017. "Shedding Light on the Shadow Economy: A Nighttime Light Approach," Journal of Development Studies, Taylor & Francis Journals, vol. 53(1), pages 32-48, January.
    • Handle: RePEc:taf:jdevst:v:53:y:2017:i:1:p:32-48
    DOI: 10.1080/00220388.2016.1171845
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    Cited by:

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    3. Francis Rathinam & Sayak Khatua & Zeba Siddiqui & Manya Malik & Pallavi Duggal & Samantha Watson & Xavier Vollenweider, 2021. "Using big data for evaluating development outcomes: A systematic map," Campbell Systematic Reviews, John Wiley & Sons, vol. 17(3), September.
    4. Lionel Roger, 2018. "Blinded by the light? Heterogeneity in the luminosity-growth nexus and the African growth miracle," Discussion Papers 2018-04, University of Nottingham, CREDIT.
    5. Mohammad Reza Farzanegan & Sven Fischer, 2023. "The Impact of a Large-Scale Natural Disaster on Local Economic Activity: Evidence from the 2003 Bam Earthquake in Iran," CESifo Working Paper Series 10502, CESifo.
    6. Yohan Iddawela & Neil Lee & Andrés Rodríguez-Pose, 2021. "Quality of Sub-national Government and Regional Development in Africa," Journal of Development Studies, Taylor & Francis Journals, vol. 57(8), pages 1282-1302, August.
    7. Brock, Gregory & German-Soto, Vicente, 2017. "Regional industrial informality and efficiency in Mexico, 1990–2013," Journal of Policy Modeling, Elsevier, vol. 39(5), pages 928-941.
    8. Aspremont Alexandre & Ben Arous Simon & Bricongne Jean-Charles & Lietti Benjamin & Meunier Baptiste, 2023. "Satellites Turn “Concrete”: Tracking Cement with Satellite Data and Neural Networks," Working papers 916, Banque de France.
    9. Felbermayr, Gabriel & Gröschl, Jasmin & Sanders, Mark & Schippers, Vincent & Steinwachs, Thomas, 2018. "Shedding Light on the Spatial Diffusion of Disasters," VfS Annual Conference 2018 (Freiburg, Breisgau): Digital Economy 181556, Verein für Socialpolitik / German Economic Association.
    10. Dike, Onyemaechi, 2019. "Informal employment and work health risks: Evidence from Cambodia," MPRA Paper 92943, University Library of Munich, Germany, revised 24 Mar 2019.
    11. Karymshakov, Kamalbek & Azhgaliyeva, Dina & Mishra, Ranjeeta & Aseinov, Dastan, 2022. "Evaluating COVID-19’s Impact on Firm Performance in the CAREC Region Using Night-Time Light Data: Azerbaijan, Georgia, Kazakhstan, and Mongolia," ADBI Working Papers 1332, Asian Development Bank Institute.
    12. Tanaka, Kiyoyasu, 2017. "Trade and investment in Cambodia," IDE Discussion Papers 667, Institute of Developing Economies, Japan External Trade Organization(JETRO).
    13. Thomas Steinwachs, 2019. "Geography Matters: Spatial Dimensions of Trade, Migration and Growth," ifo Beiträge zur Wirtschaftsforschung, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, number 81.
    14. Keola, Souknilanh & Kumagai, Satoru, 2016. "Measuring population mobility speed from space," IDE Discussion Papers 574, Institute of Developing Economies, Japan External Trade Organization(JETRO).

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    More about this item

    JEL classification:

    • E26 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Informal Economy; Underground Economy
    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements

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