https://www.um.edu.mt/library/oar/handle/123456789/107453 Tue, 14 Apr 2026 22:36:08 GMT 2026-04-14T22:36:08Z https://www.um.edu.mt/library/oar/handle/123456789/107776 Title: The impact of money laundering and corruption on inward foreign direct investment in the European Union Abstract: The aim of this dissertation is to analyse the relationship between Foreign Direct Investment inflows and money laundering and corruption across the Member States of the European Union. This analysis is carried out by making use of a panel data regression applied to a regression model built in this dissertation on the basis of past literature and economic theory. In order to value the level of money laundering and corruption in an economy, two indices were used, whereby the Basel Anti Money Laundering Index is used as a measure of money laundering opportunities in a country and an index based on the Worldwide Governance Indicators is used to measure the level of corruption. Additional independent variables were also made use of as controls, which are the real Gross Domestic Product per capita, an index of productivity, the effective tax rate, the lending rate (weighted by the country’s associated risk of their national bonds), and a dummy variable representing the COVID-19 pandemic. The model is first estimated via the pooled Ordinary Least Squares methodology and later via the Fixed Effects estimation. To gain a full understanding and to ensure acceptance of the research hypothesis the model is run several times and in different forms. Primarily, the model is run in its baseline form, and subsequently, in its relative form. The relative form of the model implies that the independent variables used as controls are transformed into the deviation from the European Union mean. Robustness checks are also performed, whereby certain control variables are switched with others in order to show the robustness of the results. Subsequently, a second line of investigation is performed whereby the model is applied to specific groups of countries only, with the first group featuring only countries experiencing low FDI levels and the second group featuring countries experiencing high FDI levels only. The results for the models making use of the EU-wide dataset all accept the research hypothesis and show a significant and negative relationship between FDI and both money laundering and corruption. The second line of investigation notes that the research hypothesis is only partially accepted in either group, with only corruption negatively affecting FDI inflows in the high FDI group and only money laundering negatively affecting FDI inflows in the low FDI group. Description: M.Sc.(Melit.) Sat, 01 Jan 2022 00:00:00 GMT https://www.um.edu.mt/library/oar/handle/123456789/107776 2022-01-01T00:00:00Z https://www.um.edu.mt/library/oar/handle/123456789/107773 Title: Multiple indicators multiple causes : estimating the relationship between fiscal illusion and the shadow economy in Malta Abstract: This dissertation looks at the relationship that exists among two complex phenomena in Malta, the shadow economy and fiscal illusion, with specific focus given to the adequacy of the Multiple Indicators and Multiple Causes (MIMIC) modelling in estimating this relationship. The literature and analysis presented in this dissertation unearthed several valuable insights. First and foremost, literature outlines a scenario where both the shadow economy and fiscal illusion are perceived in tandem, building on the existing literature in relation to the relationship between the two phenomena. Furthermore, this study employs an annual time-series dataset starting from 1980 until 2019, where specific focus is given to the behaviour of variables over this time period. MIMIC estimates provide an enhanced insight on the variables that are robust in explaining the relationship between the two phenomena specifically in Malta. The obtained results in relation to the unidirectional relationship between the two phenomena indicates that the shadow economy negatively affect fiscal illusion, and fiscal illusion positively affect the shadow economy. Additionally, various justifications are pointed out as to why certain MIMIC estimated coefficients are not entirely appropriate in measuring this relationship as at to date, in particular the small sample size due to lack of data availability. In essence, this study concludes that the unemployment rate and GDP per capita are the two most important variables in explaining the relationship between fiscal illusion and the shadow economy in Malta. Thus, it is recommended that any future research in the area of fiscal illusion and shadow economy in Malta includes these two variables in the estimation procedure. Description: M.Sc.(Melit.) Sat, 01 Jan 2022 00:00:00 GMT https://www.um.edu.mt/library/oar/handle/123456789/107773 2022-01-01T00:00:00Z https://www.um.edu.mt/library/oar/handle/123456789/107749 Title: Assessing the impact of the European Commission’s ‘Fit-for-55 package’ on the aviation industry in Malta Abstract: Member States of the European Union (EU) are currently debating on the introduction of the proposed directives under the Fit-for-55 package. The proposals identify the aviation sector as a key contributor towards carbon neutrality by 2050. Such goal is the basis for the proposed revision of the “Energy Tax Directive” (ETD), of the revision of the EU Emissions Trading System (ETS) and the proposed ReFuel-EU directive published in July 2021. All the proposals are backed with an Impact Assessment analysing the effect on EU Member States. However, the studies lack analysing the collective impact of the directives on individual Member State’s industries. Thus, this dissertation aims at assessing the impact of the three proposed directives on the aviation industry in Malta. Data on the aviation industry in Malta was gathered and a sensitivity analysis was carried out to study the impact of a tax on fuel, of obliged uptake of Sustainable Aviation Fuel (SAF) and of a downward revision of the emissions allowances. The package aims to reduce aviation CO2 emissions within the EU; however, carbon leakage is expected to arise due to shifts in demand outside the EU. The Fit-for-55 package is projected to create substantial costs for air transport users. An increase in costs is expected to reduce demand for air services, especially for Malta given it is an island at the periphery of the EU. A loss in competitiveness and connectivity for Malta is expected as a shift in demand causes airlines to switch to more profitable routes. Such proposals are expected to have negative implications on the airline’s revenue, particularly given the aftermath caused by the COVID-19 pandemic. The conclusion of this dissertation is that a solution taken within the EU alone may create significant problems for Malta’s aviation industry, given its geographical position. Description: M.Sc.(Melit.) Sat, 01 Jan 2022 00:00:00 GMT https://www.um.edu.mt/library/oar/handle/123456789/107749 2022-01-01T00:00:00Z https://www.um.edu.mt/library/oar/handle/123456789/107649 Title: The economic impact of legalising cannabis : the Maltese context Abstract: Objective: To analyse the possible outcomes that the legalisation of cannabis may pose on the economy. Therefore, the study aims to evaluate the economic benefits and costs of legalising cannabis in Malta. Methods: The European Health Interview Survey (EHIS) was the primary data source to calculate the cannabis prevalence rate in Malta. For the calculation of the benefits and cost, two main approaches were utilised, namely the Annual Cost Approach and the Human Capital Approach. The benefits and costs were not just calculated over a number of years for a comprehensive estimate. Results: Based on the assumptions taken, the total economic benefits of legalising cannabis in Malta amounted to €37.7 million. From this figure, €0.75 million are allocated to budgetary savings while €37 million are attributed to potential tax revenue generated. On the other hand, the total economic costs reached €35.8 million, from which €28.7 million are attributable to cannabis use disorder, €4.8 million are allocated to physical and mental health costs and the remaining €2.3 million are due to road accidents. Conclusion: A relatively small discrepancy can be noted between the three costs and the three benefits that were analysed in this study. Despite this, this study paves the way towards further research and investigation on the topic. Description: M.Sc.(Melit.) Sat, 01 Jan 2022 00:00:00 GMT https://www.um.edu.mt/library/oar/handle/123456789/107649 2022-01-01T00:00:00Z