Development Levels of Countries and Driving Forces of the Shadow Economy: Empirical Evidence from Panel Data
International Journal of Economic Perspectives, Volume 11, Issue 1, p. 464-473, 2017
Posted: 17 Aug 2017
Date Written: 2017
Shadow economies have been defined as all currently unregistered economic activities that contribute to the officially calculated GDP. All countries do pay greater attention to the size of the shadow economy and the determinants of shadow economy has been an important policy goal in these countries for many years. Thus, the purpose of this paper is to investigate whether the determinants of shadow economy change based on the development level of countries using panel data regression. Empirical findings show that the determinants of shadow economy change are based on the development level of countries. The paper suggests that policies designed to reduce the size of a shadow economy should be formed in considering the development stage of the economy.
Keywords: Shadow Economy; Panel Data; Developing Level
JEL Classification: E26; K42; O17
Suggested Citation: Suggested Citation