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Shadow economy and national culture: A spatial approach

Author

Listed:
  • Gloria Alarcón-García

    (Universidad de Murcia)

  • José Daniel Buendía Azorín

    (Universidad de Murcia)

  • María del Mar Sánchez de la Vega

    (Universidad de Murcia)

Abstract

This paper seeks to contribute to the empirical evidence on existing estimations of the factors partici¬pating in shadow economy. The estimations correspond to the period 1999-2015, with a sample of 82 countries. The paper examines the effect of the Hofstede cultural variables, along with other socioeconomic fac¬tors on the shadow economy, and incorporates the spatial variable as an additional explanatory variable. The estimation carried out as a novelty uses a panel model that incorporates the spatial filter technique. Our study confirms that national culture and how developed a country is are significant factors in ex¬plaining the different levels of shadow economies.

Suggested Citation

  • Gloria Alarcón-García & José Daniel Buendía Azorín & María del Mar Sánchez de la Vega, 2020. "Shadow economy and national culture: A spatial approach," Hacienda Pública Española / Review of Public Economics, IEF, vol. 232(1), pages 53-74, March.
    • Handle: RePEc:hpe:journl:y:2020:v:232:i:1:p:53-74
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    References listed on IDEAS

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    1. Bruce Kogut & Harbir Singh, 1988. "The Effect of National Culture on the Choice of Entry Mode," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 19(3), pages 411-432, September.
    2. Richard H. Franke & Geert Hofstede & Michael H. Bond, 1991. "Cultural roots of economic performance: A research noteA," Strategic Management Journal, Wiley Blackwell, vol. 12(S1), pages 165-173, June.
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    4. Andreas Buehn & Friedrich Schneider, 2012. "Corruption and the shadow economy: like oil and vinegar, like water and fire?," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 19(1), pages 172-194, February.
    5. Torgler, Benno & Schneider, Friedrich, 2009. "The impact of tax morale and institutional quality on the shadow economy," Journal of Economic Psychology, Elsevier, vol. 30(2), pages 228-245, April.
    6. Axel Dreher & Friedrich Schneider, 2010. "Corruption and the shadow economy: an empirical analysis," Public Choice, Springer, vol. 144(1), pages 215-238, July.
    7. Friedrich Schneider & Friedrich Schneider, 2008. "Shadow Economies and Corruption all over the World: What do we Really Know?," Chapters, in: Michael Pickhardt & Edward Shinnick (ed.), The Shadow Economy, Corruption and Governance, chapter 7, pages 122-187, Edward Elgar Publishing.
    8. Túlio Cravo & Guilherme Resende, 2013. "Economic growth in Brazil: a spatial filtering approach," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 50(2), pages 555-575, April.
    9. Daniel A. Griffith, 2003. "Spatial Autocorrelation and Spatial Filtering," Advances in Spatial Science, Springer, number 978-3-540-24806-4, February.
    10. Mazhar, Ummad & Méon, Pierre-Guillaume, 2017. "Taxing the unobservable: The impact of the shadow economy on inflation and taxation," World Development, Elsevier, vol. 90(C), pages 89-103.
    11. Helmut Herwartz & Egle Tafenau & Friedrich Schneider, 2015. "One Share Fits All? Regional Variations in the Extent of the Shadow Economy in Europe," Regional Studies, Taylor & Francis Journals, vol. 49(9), pages 1575-1587, September.
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    14. Benno Torgler, 2005. "Tax morale in Latin America," Public Choice, Springer, vol. 122(1), pages 133-157, January.
    15. Egle Tafenau & Helmut Herwartz & Friedrich Schneider, 2010. "Regional Estimates of the Shadow Economy in Europe," International Economic Journal, Taylor & Francis Journals, vol. 24(4), pages 629-636.
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    Cited by:

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    More about this item

    Keywords

    Hofstede theory; shadow economy; fiscal evasion; tax compliance; spatial dependence.;
    All these keywords.

    JEL classification:

    • H2 - Public Economics - - Taxation, Subsidies, and Revenue
    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
    • O5 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies

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