Shadow economy in a turbulent environment: evidence from Poland

Purpose - The purpose of this paper is to provide an empirical insight into the functioning of the informal sector in Poland and highlight the reasons for involvement of economic agents in the new forms of the shadow economy. Design/methodology/approach - The paper is focused on the analysis of different manifestations of unregistered economic activities in Poland. The author draws upon the latest available research findings on the subject including shadow economy estimates. Finally, the case study analysis of the tobacco industry in Poland has been used to exemplify and highlight the driving forces conducive to the expansion of the informal sector. Findings - The informal sector’s share of the Polish economy in the years 2010-2015 was put as ranging between 12.1 per cent gross domestic product (GDP) and 14.5 per cent GDP (with the peak in 2013) by the GUS (Polish Main Statistical Office), between 19.2 per cent GDP and 21.1 per cent GDP by the IBnGR think tank (peak in 2012) and between 23.3 per cent and 25.4 per cent GDP by Professor F. Schneider. Research limitations/implications - The case study of the tobacco industry, although well illustrates the dynamics of the shadow economy, does not provide a comprehensive picture of the Poland’s informal sector. Practical implications - The paper provides tips and recommendations aimed at reducing the size of the shadow economy. Social implications - Reducing the size of the informal sector could strengthen the social integrity and cohesion. Originality/value - The paper provides insight into new areas and manifestations of the shadow economy in Poland exemplified by the case study of the tobacco industry.