Underground economy in malaysia: evidence from smuggling activities in penang

This paper discusses the extent of underground economy in Malaysia, with a special reference to smuggling activities in Penang. Although the impact of underground economy on developed countries could be minor but it has a serious implication on developing countries. Nonetheless, the study about underground economy is relative scarce. By focusing on the smuggling activities, this study attempts to measure the extent of underground economy in Malaysia. The data are from the confiscated and contrabands smuggled to Malaysia, but limited to cases observed in Penang. All the illegal smuggling activities are recorded from year 2004 to 2008. The results explained the trend of this version of underground economy in Malaysia from the smuggling perspective.