Upper-middle Income Economies Research Articles

Global urbanization and ruralization lessons of clean energy access gap

While energy access is improving across economic groups globally, here remains the monumental challenge of clean energy inequality that has further aggravates climate-related problems. To further address clean energy inequality, this study offers novel understanding on the forces behind clean energy access divide associated with urbanization and ruralization by employing the case of the high, low, lower-middle, and upper-middle income economies in the period 2010 to 2021. By using empirical analysis, the results reveal that (i) annual growth in the economy, and (ii) literacy parity between male and female further worsen clean energy access between urban and rural population. Contrarily, innovative activities reduce urban-rural clean energy access by an elasticity of 3.510. These findings, in theory and practice, provide policy insight toward specifically achieving the United Nation's Sustainable Development Goals 7 and 10, and other global challenges.

Does Social Media Penetration Enhance Democratic Institutions? Evidence from Varieties of Democracy Data

AbstractWe examine whether social media enhances democracy using cross-sectional data from 145 countries. We used Facebook penetration as a proxy for social media. Also, based on the complex definition of democracy, high-level indices, such as egalitarian, participatory, liberal, electoral, and deliberative democracies, were used to capture democracy. Our endogeneity-corrected results documented that high social media penetration, on average, enhances all forms of democracy. In descending order, social media penetration has contributed more to enhancing democracy in high-income economies, followed by lower-middle and upper-middle income economies. In low-income economies, social media penetration has a negative effect on democracy indices. We also documented heterogeneity in the findings based on regions. Marginal analysis also revealed that the positive effect of social media on democracy is higher in countries with higher internet penetration. We suggest that with appropriate interventions, policymakers could leverage social media to enhance democratic institutions.

Empowering Women through Tourism and Financial Development: Empirical Evidence from Upper Middle-Income Economies

The concept of women’s empowerment in this study focuses on international tourism, economic growth, financial development and financial inclusion among others as integral aspects that would help achieve the Sustainable Development Goals. Using panel data from 15 Upper Middle-Income Countries between 1995 and 2017, the study employs cutting edge approaches such as fixed-effect models, random effect models, GMM and robust LS regressions to identify major impacts. The results show a strong relationship between these factors regarding women’s empowerment with clear impacts on self-employment among the women and increased participation in serviceability and industrial areas. In particular, these factors play a very important role in total employment of women. The analysis reinforces the ability of international tourism, economic growth, financial development and financial inclusion to facilitate women’s empowerment in Upper Middle-Income Countries. This study illuminates the complex realities that guide how a woman participates in power structures, which partly exposes broad aspiration of sustainable development.

Tracing carbon emissions and intensity in relational global value chain activities

Existing studies on emission accounting in global value chains (GVCs) have not focused on the relational nature of GVC activities manifested as the interaction of intermediate goods between enterprises. This paper proposes a relational GVC emissions accounting framework based on an inter-country input-output (ICIO) model distinguishing between domestic-owned enterprises (DOEs) and foreign-invested enterprises (FIEs), which is classified as trade-based, investment-based and hybrid-based emissions. Using AMNE-ICIO tables from 2005 to 2016, this paper traces emissions and carbon intensity in relational GVC activities at the global, economic, and industry levels. We find the following: (1) Investment-based emissions accounted for about 94.15% of the increase in relational GVC emissions, of which more than half comes from the interactive activities between DOEs and FIEs. (2) For the United States, high-income economies, and high-tech manufacturing, investment-based emissions were higher than trade-based emissions, and the reverse was true for upper-middle and lower-middle income economies and China. (3) Although relational GVC carbon intensity was high, the trend of decline was significant. (4) Compared to trade activities, investment-based activities were less carbon intensity in China and upper-middle income economies due to the interaction of production between FIEs and DOEs. The findings add new insights into the coordination of global emissions reductions and the allocation of emissions responsibility.

New evidence of the relationship between media, culture industry, and mineral efficiency in high and low income asian economies

In addressing the current challenge, this research thoroughly investigates the intricate interplay between media, culture, and mineral efficiency in 23 diverse Asian economies, classified based on their income levels. Leveraging data spanning from 2005 to 2020 and utilizing logarithmic transformations, this study navigates the complex web of relationships. The results highlight a notable positive impact of media penetration on mineral efficiency, particularly in high and upper middle-income nations that boast advanced media infrastructure and higher levels of education. Concurrently, increased government expenditure on media amplifies mineral efficiency within these contexts. The influence of advertising, however, varies depending on consumer behavior, media infrastructure, and market maturity. Control variables bring to light the negative impact of population size and the positive correlation of clean energy with mineral efficiency in high and upper middle-income economies. Formulating tailored policies for media-driven enhancement of mineral efficiency is crucial for both income groups, with a focus on strategic campaigns, cultural initiatives, and educational programs.

Does obesity Kuznets curve exist in developing economies? Evidence from 38 African countries based on heterogeneous panel data analysis on income-level classification.

The global pandemic disease known as the obesity epidemic has spread throughout the planet. Particularly, Africa is facing a growing problem of obesity, and the trend is rising. This is a result of a ticking time bomb. Given the claim that multiple socio-economic factors significantly affect the diversity in obesity rates between nations, economic development can be seen as a key contributor to this variation. Relying on the aforementioned avowal, this extant research examines the relationship between obesity and economic growth using urbanization, trade openness, and unemployment as intermittent variables within the Obesity Kuznets Curve (OKC) framework. Using panel data from 1990 to 2020, a panel of 38 African countries subdivided into income levels (Low income, Lower-middle income, and Upper-middle income) were analyzed. With the presence of residual cross-sectional reliance and slope heterogeneity, the Augmented Mean Group (AMG) econometric approach is employed. Key outcomes from the mentioned estimation method unveiled that economic growth positively impacts obesity among all the study panels. Variably, unemployment was evidenced to have a palpable positive impact on obesity concerning Low-income economies whereas on the side of the Lower-middle income panel together with Upper-middle income economies and the aggregated panel, a significant negative relationship is observed with obesity. Further, urbanization enhanced obesity in the Low-income panel and the aggregated panel of African nations, whereas an adverse effect is identified in both the Lower-middle and Upper-middle economies in Africa. Moreover, except for Low-income African economies, all the other panels of African nations in terms of income levels were noted to have a significant negative effect on obesity from trade openness. Finally, the long-run coefficients indicated that the OKC is valid among all panels of African countries. The study thus preferably suggests in African economies that addressing the inverted U-shape relationship between obesity and economic growth requires a multifaceted approach that considers the evolving dynamics of both factors. Policy makers should, therefore, aim to balance promoting economic growth and safeguarding public health through targeted interventions and long-term strategies.

Does tourism reduce the shadow economy? An international evidence

This paper investigates one of the positive contributions of tourism to the economy through the lens of its influences on the shadow economy. Specifically, our study analyzes the effects of five indicators of tourism consumption (including domestic tourism spending, international travel and tourism consumption, business tourism spending, leisure tourism spending, and outbound tourism spending on the percentage of shadow economy to GDP) in 129 economies between 1996 and 2015. We find interesting results that contribute to the existing literature about tourism economics. Firstly, the development of the inbound tourism industry reduces the shadow economy significantly, while outbound tourism causes higher underground economic activities. Secondly, the influence of tourism on the shadow economy is significant in both the short-run and long run with a stronger effect in the long run. Thirdly, the effect of tourism on the shadow economy is more significant in the 42 High-Income Economies and 54 Low and Lower-middle Income Economies, while it is less obvious in the 33 Upper-Middle Income Economies. These findings have been checked by a battery of robustness checks ensuring their statistical consistency.

Prevalence of the metabolic syndrome in African populations: A systematic review and meta-analysis.

The metabolic syndrome (MS) is a leading cause of death worldwide. Several studies have found MS to be prevalent in various African regions. However, no specific estimates of MS prevalence in African populations exist. The aim of this study was to estimate the overall prevalence of MS in the African populations. A systematic review was conducted in PubMed, Web of Science, Africa Index Medicus, and African Journal Online Scopus to find studies published up to the 15th of August 2022. Pooled prevalence was calculated based on six diagnostic methods. The pooled prevalence of MS was estimated using a random-effects model. Our risk of bias analysis was based on the Hoy et al. tool. A Heterogeneity (I2) assessment was performed, as well as an Egger test for publication bias. PROSPERO number CRD42021275176 was assigned to this study. In total, 297 studies corresponding to 345 prevalence data from 29 African countries and involving 156 464 participants were included. The overall prevalence of MS in Africa was 32.4% (95% CI: 30.2-34.7) with significant heterogeneity (I2 = 98.9%; P<0.001). We obtained prevalence rates of 44.8% (95% CI: 24.8-65.7), 39.7% (95% CI: 31.7-48.1), 33.1% (95% CI: 28.5-37.8), 31.6% (95% CI: 27.8-35.6) and 29.3% (95% CI: 25.7-33) using the WHO, revised NCEP-ATP III, JIS, NCEP/ATP III and IDF definition criteria, respectively. The prevalence of MS was significantly higher in adults >18 years with 33.1% (95%CI: 30.8-35.5) compared to children <18 years with 13.3% (95%CI: 7.3-20.6) (P<0.001). MS prevalence was significantly higher in females with 36.9% (95%CI: 33.2-40.7) compared to males with 26.7% (95%CI: 23.1-30.5) (P<0.001). The prevalence of MS was highest among Type 2 diabetes patients with 66.9% (95%CI: 60.3-73.1), followed by patients with coronary artery disease with 55.2% (95%CI: 50.8-59.6) and cardiovascular diseases with 48.3% (95%CI: 33.5-63.3) (P<0.001). With 33.6% (95% CI: 28.3-39.1), the southern African region was the most affected, followed by upper-middle income economies with 35% (95% CI: 29.5-40.6). This study, regardless of the definition used, reveals a high prevalence of MS in Africa, confirming the ongoing epidemiological transition in African countries. Early prevention and treatment strategies are urgently needed to reverse this trend.

Energy intensity, economic structure, and capital goods imports in upper-middle income countries: Insights from HDBSCAN clustering

In recent years, there have been substantial efforts to improve the efficiency of production resources, including energy use, to reduce the human footprint from economic activities. Increasing production capacity and incorporating new technologies that improve energy efficiency in the production process are two primary challenges faced by developing countries, where capital goods imports could play a key role in addressing both challenges. This paper contributes to the empirical literature by examining the relationship between energy intensity, economic structure, and capital goods imports in a set of 36 upper-middle income economies in the period 2000–2019. The empirical strategy recognizes the existing heterogeneity among the broad group of countries in the sample by implementing the Hierarchical Density-Based Spatial Clustering of Applications with Noise algorithm, a state-of-the-art unsupervised machine learning technique which allows identification of clusters of countries and years. The results show the existence of ten clusters, where energy intensity has the most relevant positive associations with industry share, trade openness, and merchandise imports. Improvements in regulatory quality are associated with lower energy intensity. The direction and strength of the relationship between energy intensity and capital goods imports depend on the cluster; nonetheless, it is usually a weak relationship. Policy implications are discussed.

Low-carbon transition risks for India’s financial system

As the low-carbon transition accelerates, loans to and investments in carbon-intensive assets, firms and sectors are at risk of not generating the anticipated returns, with implications for individual financial institutions as well as financial markets more broadly. However, research on this topic has largely been focused on high- and upper-middle income economies to date. In this paper, we explore the salience of this issue in India – one of the world’s largest emitters and economies – by asking: (1) how extensive is financial-sector exposure to transition risks? And: (2) are finance professionals and financial institutions taking sufficient action to manage those transition risks? Our findings reveal that India’s financial sector is much more heavily exposed to low-carbon transition risks than standard borrowing classifications might suggest. For example, our granular assessment of individual loans and bonds finds that three-fifths of lending to the ‘mining’ sector is for oil and gas extraction, while one-fifth of ‘manufacturing’ debt is for petroleum refining and related industries. We also find that electricity production – by far the largest source of emissions – accounts for 5.2% of outstanding credit, but that only 17.5% of this lending is to pureplay renewables. Yet our survey of India’s largest financial institutions suggests that there have been limited efforts to identify, measure or manage low-carbon transition risks. Fewer than half of the 154 finance professionals surveyed were familiar with environmental issues including climate change mitigation and adaption, greenhouse gas emissions or transition risks. Only four of the ten major financial institutions surveyed collect information on ESG risks, and these firms do not systematically incorporate that data into business continuity planning, internal capital adequacy assessment processes, credit risk assessments, enterprise risk management frameworks or loan product pricing. Given extensive financial-sector exposure to low-carbon transition risks coupled with the absence of bottom-up action to manage those risks, our findings suggest that financiers, regulators and policymakers in emerging and developing economies should be acting swiftly to ensure an orderly transition to net-zero.

The Effects of Regulatory Performance on the Debt–Growth Relationship: Cases of Upper-Middle-Income Economies

Upper-middle-income economies (UMIE) are experiencing an economic slowdown, partly due to weak regulatory performance. This issue leads to slow growth in private sector participation, thus limiting the ability to achieve higher economic growth. At this critical point, the government’s role is to inject funds into economies, hoping that growth can be increased and sustained for an extended period. Nevertheless, injecting more funds through borrowings from external debt exposes economies to vulnerable conditions. Thus, this study aimed to examine how regulatory performance affects economic growth and moderates the debt–growth relationship in UMIE. By using the generalized method of moments (GMM) as an estimation method for 32 countries from 2004 to 2020, regulatory performance was found to adversely affect economic growth. Moreover, as regulatory performance improves, public debt is expected to enhance the economic growth of UMIE. These findings are novel, as they provide significant evidence for the importance of improving the regulatory performance of UMIE. Weak regulatory performance might force a government to become the engine of growth instead of the private sector, thus leading to the adverse effect of debt on growth in UMIE. These findings have to several policy implications, particularly regarding reducing bureaucracy and improving regulatory performance in UMIE. Future researchers could extend this study by comparing the results from different groups of economies or countries.

Comparative Study on Lower-Middle-, Upper-Middle-, and Higher-Income Economies of ASEAN for Fiscal and Current Account Deficits: A Panel Econometric Analysis

For the last three decades, ASEAN has been facing a persistent fiscal deficit. However, the impact of fiscal deficit on the current account deficit in the sub-groups of ASEAN is still unknown. This study aims to investigate the impact of fiscal deficit on current account deficit and their relationship among the three sub-groups of ASEAN which are based on gross national income (GNI), i.e., lower-middle-, upper-middle-, and higher-income countries. The analysis covers the panel data collected over the span of the last three decades (1990–2020) for ten Southeast Asian nations (ASEAN). The analyses incorporate the panel methodology for data analysis such as panel unit root for checking data stationarity, cointegration testing, panel autoregressive distributed lag (PARDL) for short- and long-run analysis, cointegration regression (fully modified and dynamic ordinary least squares) for significance, the panel Dumitrescu and Hurlin Granger causality test for examining causal relationships in tested variables, and stability diagnostics and CUMSUM and CUSUMSQ techniques for structural breaks and coefficient stability in the model. In lower-middle-income economies (LMIE), results indicate the existence of a unidirectional causal relationship from the current account deficit (CAD) to the fiscal deficit (FD), suggesting a reverse causal relationship from CAD to FD. In the long run, FD does not significantly induce CAD, while real interest rate (RIR) and exchange rate (EXC) influence CAD. In upper-middle-income economies (UMIE), results specify that there is no causality between FD and CAD. The RIR, EXC, and FD are significant to CAD in the long run. In higher-income economies (HIE), RIR and FD have an influence on CAD in the long run period. Moreover, from CAD to FD, a unidirectional causal association exists, and likewise for LMIE. This is a reverse causal relationship from CAD to the FD, supporting the current account targeting hypothesis (CATH) in both the LMIE and HIE groups. This study recommends that the LMIE and HIE groups can use the fiscal deficit as a tool to eliminate the unfavorable current account position. Policymakers can target EXC and RIR to stabilize CAD in long run. In UMIE and HIE, policymakers must consider FD alarming, as it can induce CAD in the long run. The RIR can be the targeted factor in the sub-groups of ASEAN.

Modelling the Asymmetric Relationship Between Urbanization, Energy Consumption and CO2 Emissions: A Study of Income Classified Economies

This study investigates how CO2 emissions behave with the increase or decrease in urbanization and energy consumption, employing pooled ordinary least square (OLS) estimator on a panel of 137 countries from 1961–2019. The findings indicate that there is asymmetry between the process of urbanization, energy consumption and CO2 emissions. From a global perspective, the asymmetry of urbanization on CO2 emissions is more prominent than energy consumption, although CO2 emissions are more responsive towards energy consumption in symmetric cases. For low-income economies, urbanization does not exhibit any significant impact on carbon emission, but energy consumption does. For lower-middle income economies, a lower level of urbanization has a greater impact on CO2 emission than an increase in urbanization, but carbon emissions are more reactive towards energy consumption. Moreover, both urbanization and energy consumption posit a significant impact on carbon emission for upper-middle income economies. Therefore, environment-friendly urbanization and efficient energy consumption should be prioritized to offset the negative externalities.

Unveiling the Linkages between Economic Complexity, Innovation and Growth: The Case of High-Income and Upper Middle-Income Economies

This article explores the essential variables of economic complexity, innovation, and growth by researching the relationships between imperative economic indicators in selected high-income and upper middle-income economies. The economic complexity and innovation of the observed economies are robustly linked to their economic growth. The goal of this article is to investigate the significance of economic complexity and innovation in encouraging economic growth in high-income and upper middle-income economies. Miscellaneous methodological measurement instruments have been applied towards exploring the linkages between the crucial variables of economic complexity, innovation, and economic growth. The empirical data necessary for conducting this exploration were accumulated from primary and auxiliary sources. Analysis of the observed economies was performed using the statistical software package SPSS 25. The exploration results reveal the essential determinants of economic complexity and innovation for economic growth in selected countries. The interrelated determinants supervised for enhancing innovation and growth are linked to synthesized indicators of economic complexity. Confirmation of the heterogeneity between essential variables and awareness of sensitivity is the foundation for the subsequent acceptance of convenient economic complexity indicators for improvement of the critical fields of national economies.

Nuclear energy transition and CO2 emissions nexus in 28 nuclear electricity-producing countries with different income levels.

BackgroundNuclear energy carries the least environmental effects compared to fossil fuels and most other renewable energy sources. Therefore, nuclear energy transition (NET) would reduce pollution emissions. The present study investigates the role of the NET on CO2 emissions and tests the environmental Kuznets curve (EKC) in the 28 nuclear electricity-producing countries from 1996–2019.MethodsAlong with a focus on the whole panel, countries are divided into three income groups using the World Bank classification, i.e., three Lower-Middle-Income (LMI), eight Upper-Middle-Income (UMI), and 17 High-Income (HI) countries. The cross-sectional dependence panel data estimation techniques are applied for the long and short run analyses.ResultsIn the long run, the EKC is corroborated in HI countries’ panel with estimated positive and negative coefficients of economic growth and its square variable. The Netherlands, Sweden, Switzerland, and the USA are found in the 2nd stage of the EKC. However, the remaining HI economies are facing 1st phase of the EKC. Moreover, economic growth has a monotonic positive effect on CO2 emissions in LMI and UMI economies. NET reduces CO2 emissions in UMI and HI economies. On the other hand, NET has an insignificant effect on CO2 emissions in LMI economies. In the short run, the EKC is validated and NET has a negative effect on CO2 emissions in HI countries and the whole panel. However, NET could not affect CO2 emissions in LMI and UMI countries. Based on the long-run results, we recommend enhancing nuclear energy transition in UMI and HI economies to reduce CO2 emissions. In addition, the rest of the world should also build capacity for the nuclear energy transition to save the world from global warming.

The International Economy Effects on Inequality: Revisiting International Trade, Economic Complexity, and Foreign Direct Investment

ABSTRACT This study investigates the relationship between proxies of the international economy and inequality. We focus on 17 Latin American countries during the period of 1991 to 2017. The results suggest the inexistence of a relationship between inequality and the independent variables, with some exceptions that reveal an indirect effect for upper income economies associated to trade and foreign direct investment, after redistributive policies. In the case of upper-middle income economies, findings show an indirect effect between inequality and economic complexity before taxes and transfers. In the end, the policy implications suggest that Latin American countries could openly participate in the international economy process without increasing the levels of inequality.

Export Dynamics and Income Inequality: New Evidence on Export Quality.

Previous literature has highlighted the relationship between export diversification and income inequality. The present study attempts to explore the influence of export quality on income inequality. A global sample of 92 economies consisting of 30 low- and lower-middle-income economies (LMEs), 21 upper-middle-income economies (UMEs), and 41 high-income economies (HIEs) over the period 2002–2014, is collected to create a balanced set of panel data. Using econometric techniques for balanced panel data to deal with cross-sectional dependence, heteroscedasticity, and endogeneity, we first find that the effect of export quality is negative and significant on the Gini index pre-tax and pre-transfer in LMEs and UMEs, implying that export quality reduces income inequality. Second, export quality has a positive and significant impact on income inequality in HIEs. Our findings imply that different economic policies should be considered for dealing with income inequality among different income groups of economies.

Timelines to initiate a phase III trial across the globe: a sub-analysis of the APHINITY trial.

BackgroundGeographic location and national income may influence access to innovation in healthcare. We aimed to study if geographical location and national income influenced the timelines to activate the global phase III APHINITY trial, evaluating adjuvant pertuzumab in patients with HER2-positive early breast cancer.MethodsTime from regulatory authority (RA) submission to approval (RAA), time to Ethics Committee/Institutional Review Board (EC/IRB) approval, time from study approval by EC/IRB to first randomised patient and from first to last randomised patient were collected. Analyses were conducted grouping countries by geographical region or economic income classification.ResultsForty-one countries (of 42) had data available regarding all relevant timelines. No statistical difference was observed between the time to RAA and geographical region (p = 0.47), although there was a trend to longer time to RAA in upper middle-income economies (p = 0.07). Except for time from first to last patient randomised, there was wide variation in timelines overall and within geographical regions and economic income groups.ConclusionsGeographical location and income classification did not appear to be the major drivers influencing time for clinical trial activation. Wide variability in activation timelines within geographical regions and income groups exists and is worthy of further investigation.

Economic evaluation of seasonal influenza vaccination in elderly and health workers: A systematic review and meta-analysis

SummaryBackgroundA number of cost-effectiveness analysis of influenza vaccination have been conducted to estimate value of influenza vaccines in elderly and health workers (HWs). This study aims to summarize cost-effectiveness evidence by pooling the incremental net monetary benefit (INMB) of influenza vaccination.MethodsA systematic review was performed in electronic databases from their inceptions to February 2022. Cost-effectiveness studies reporting quality-adjusted life year (QALY), or life year (LY) of influenza vaccination were included. Stratified meta-analyses by population, perspective, country income-level, and herd-effect were performed to pool INMB across studies. The protocol was registered at PROSPERO (CRD42021246746).FindingsA total of 21 studies were included. Eighteen studies were conducted in elderly, two studies were conducted in HWs, and one study was conducted in both elderly and HWs. According to pre-specified analyses, studies for elderly in high-income economies (countries) (HIEs) and upper-middle income economies (UMIEs) without herd effect could be pooled. For HIEs under a societal perspective, the perspective which identify all relevant costs occurred in the society including direct medical cost, direct non-medical cost and indirect cost, pooled INMB was $217·38 (206·23, 228·53, I2 =28.2%), while that for healthcare provider/payer perspective was $0·20 (-11,908·67, 11,909·07, I2 = 0.0%). For societal perspective in UMIEs, pooled INMB was $28·39 (-190·65, 133·87, I2 = 92.8%). The findings were robust across a series of sensitivity analyses for HIEs. Studies in HWs indicated that influenza vaccination was cost-effective compared to no vaccination or current practice.InterpretationInfluenza vaccination might be cost-effective for HWs and elderly in HIEs under a societal perspective with relatively small variations among included studies, while there remains limited evidence for healthcare provider/payer perspective or other level of incomes. Further evidence is warranted.FundingThis study was funded by a grant of Immunization, Vaccine and Biologicals department of the World Health Organization. The authors would like to acknowledge the contributions of the US CDC which provided financial support to the development and publication of this report. Grant number US CDC, WHO IVR (U50CK000431).

Does economic complexity matter for the shadow economy?

Reflecting the geography of economic activities, economic complexity may be important for the shadow economy . This study is the first attempt to analyse the influence of economic complexity on the shadow economy. Analyses are carried out for 115 economies and three subsamples ( i.e., 45 low- and lower-middle-income economies (LMEs); 32 upper-middle-income economies (UMEs); and 38 high-income economies (HIEs)) from 1995 to 2017. Several estimates are applied to panel data, providing robust results. First , increases in economic complexity are found to ( i ) reduce the relative size of the shadow economy (% official GDP); while ( ii ) increasing the absolute size of the shadow economy (constant USD). This implies that economic complexity might have benefits for both the official and shadow economies, but the benefits for the official economy are likely dominant over the shadow economy. Second , economic complexity appears to have a negative influence on both the relative and absolute size of the shadow economy in the long run. Third , the analyses for the three subsamples add further findings. The influence of economic complexity on the shadow economy is found to be consistent in HIEs and LMEs, while economic complexity has a negative influence on both the relative and absolute size of the shadow economy in UMEs.