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The shadow economy beyond European public governance

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  • Quintano, Claudio
  • Mazzocchi, Paolo

Abstract

The purpose of this paper is to try to analyze the Shadow Economy (SE) and its determinants by means of the Structural Equation Model (SEM)-Partial Least Squares (PLS). The overall topic of the SEM-PLS approach is controversially debated in the literature. In the past decades, the focus on the SE has increased and the range in the estimated size of this phenomenon is very divergent. By examining the effects of a set of indicators, economic theory often emphasizes the need for lower taxes and less regulation, but many other factors, such as administrative quality, are frequently neglected. Policy implications are discussed. Estimates for the SE as a percentage of GDP can be calculated and European countries are clustered according to the obtained results.

Suggested Citation

  • Quintano, Claudio & Mazzocchi, Paolo, 2013. "The shadow economy beyond European public governance," Economic Systems, Elsevier, vol. 37(4), pages 650-670.
    • Handle: RePEc:eee:ecosys:v:37:y:2013:i:4:p:650-670
    DOI: 10.1016/j.ecosys.2013.07.005
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    Cited by:

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    2. Claudius Gräbner-Radkowitsch & Dennis Tamesberger & Philipp Heimberger & Timo Kapelari & Jakob Kapeller, 2022. "Trade Models In The European Union," Economic Annals, Faculty of Economics and Business, University of Belgrade, vol. 67(235), pages 7-36, October –.
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    4. Aleksandra Fedajev & Milica Arsiæ, 2017. "Drivers of shadow economy in transition countries during the post-crisis period: The results of structural model," Proceedings of FIKUSZ 2017, in: Monika Fodor (ed.),Proceedings of FIKUSZ '17, pages 20-34, Óbuda University, Keleti Faculty of Business and Management.
    5. Zhijun Li & Yigang Wei & Yan Li & Zhicheng Wang & Jinming Zhang, 2020. "China’s Provincial Eco-Efficiency and Its Driving Factors—Based on Network DEA and PLS-SEM Method," IJERPH, MDPI, vol. 17(22), pages 1-31, November.

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    More about this item

    Keywords

    Shadow economy; Non-observed economy; Structural equation model partial least squares; European public governance;
    All these keywords.

    JEL classification:

    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
    • E26 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Informal Economy; Underground Economy

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