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The Relationship between Informal Economy and GDP Growth: A Study on South-Asian Developing Countries


Md. Touhidul Islam1*, and Md. Jahangir Alam2


1Department of Business Administration, Gono University, Bangladesh; and 2Research Cell, Gono University, Bangladesh

*Correspondence: touhid.finance.ru@gmail.com

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ABSTRACT

The informal economy has gained increased attention from policy-makers and development practitioners, especially in the context of South-Asian developing countries. Though measuring the informal economy is difficult, statistics show the rate of employment creation by the informal sector in this region is higher than the rest of the world. But the GDP rate of growth in this region is still emerging in the global economic competition that indicates its effectiveness in the South-Asian region. The study was carried out to identify the relationship between the informal economy and the GDP rate of growth in South-Asian developing countries. The target population was economies of 8 South-Asian countries, which were also taken as the sample size. Data was collected from secondary sources and analyzed using multiple regression analysis. Results indicated that there is a significant positive connection between the informal economy and the GDP rate of growth in South Asian developing countries. Therefore, it is necessary for the policy-makers, and expansion practitioners in this region to give emphasis on the informal sector entrepreneurs to ensure constant economic growth and maturation.


Keywords: Informal Economy, Informal Employment, GDP Growth, Policy-makers, and Developing Countries


CitationIslam MT, Alam MJ. (2019). The Relationship between Informal Economy and GDP Growth: A Study on South-Asian Developing Countries. Can. J. Bus. Inf. Stud., 1(5), 01-09. https://doi.org/10.34104/cjbis.019.0109


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