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Estimating shadow economy and tax evasion in Romania. A comparison by different estimation approaches

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  • Dell’Anno, Roberto
  • Davidescu, Adriana AnaMaria

Abstract

The paper aims to estimate the size of shadow economy (SE) and tax evasion (TE) in Romania for the period 2000–2017. We apply different approaches – Multiple Indicator Multiple Cause (MIMIC) model for the estimation of the size of the SE and the currency demand approach for the estimation of TE – in order to lay emphasis on peculiarities of these two phenomena.

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  • Dell’Anno, Roberto & Davidescu, Adriana AnaMaria, 2019. "Estimating shadow economy and tax evasion in Romania. A comparison by different estimation approaches," Economic Analysis and Policy, Elsevier, vol. 63(C), pages 130-149.
    • Handle: RePEc:eee:ecanpo:v:63:y:2019:i:c:p:130-149
    DOI: 10.1016/j.eap.2019.05.002
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    References listed on IDEAS

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    Cited by:

    1. Patrizia Gazzola & Audrey Paterson & Stefano Amelio & Daniele Grechi & Stefano Cristina, 2023. "The role of individual social responsibility and corporate social responsibility in the tax fraud war: A comparison between the priorities of Italian and Romanian consumers," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 30(5), pages 2265-2277, September.
    2. Emmanuel U. Haruna, 2023. "The multidimensional effect of financial development on the shadow economy in Africa: A dynamic panel analysis approach," International Economics and Economic Policy, Springer, vol. 20(2), pages 327-365, May.
    3. Angela TIMUS & Alexandru CEBAN, 2020. "Highlights, Concepts And Methods In Addressing The Shadow Economy: Theoretical Approach And Some Countries’ Experience," Contemporary Economy Journal, Constantin Brancoveanu University, vol. 5(3), pages 66-82.
    4. Piotr Dybka & Bartosz Olesiński & Marek Rozkrut & Andrzej Torój, 2023. "Measuring the model uncertainty of shadow economy estimates," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 30(4), pages 1069-1106, August.
    5. Jasna Atanasijević & Marko Danon & Zorana Lužanin & Dušan Kovačević, 2022. "Shadow Economy Estimation Using Cash Demand Approach: The Case of Serbia," Sustainability, MDPI, vol. 14(20), pages 1-19, October.
    6. Gamal, Awadh Ahmed Mohammed & Rambeli, Norimah & Abdul Jalil, Norasibah & Kuperan Viswanathan, K., 2019. "A modified Currency Demand Function and the Malaysian shadow economy: Evidence from ARDL bounds testing approach," Economic Analysis and Policy, Elsevier, vol. 64(C), pages 266-281.
    7. Alvarado, Rafael & Tillaguango, Brayan & López-Sánchez, Michelle & Ponce, Pablo & Işık, Cem, 2021. "Heterogeneous impact of natural resources on income inequality: The role of the shadow economy and human capital index," Economic Analysis and Policy, Elsevier, vol. 69(C), pages 690-704.
    8. Canh Phuc Nguyen & Binh Nguyen Quang & Thanh Dinh Su, 2023. "Institutional frameworks and the shadow economy: new evidence of colonial history, socialist history, religion, and legal systems," Economia e Politica Industriale: Journal of Industrial and Business Economics, Springer;Associazione Amici di Economia e Politica Industriale, vol. 50(3), pages 647-675, September.
    9. Nguyen, Canh Phuc, 2022. "Does economic complexity matter for the shadow economy?," Economic Analysis and Policy, Elsevier, vol. 73(C), pages 210-227.
    10. Asgari, Heshmatolah & Moridian, Ali, 2023. "Investigating the Role of Human Capital and Shadow Economy in the Impact of Natural Resource Rent on Income Inequality with Regime Change (in Persian)," The Journal of Planning and Budgeting (٠صلنامه برنامه ریزی و بودجه), Institute for Management and Planning studies, vol. 28(4), pages 75-110, December.
    11. Mangirdas Morkunas, 2022. "Measuring the Level of the Youth Informal Economy in Lithuania in 2004–2020," Economies, MDPI, vol. 10(11), pages 1-13, November.
    12. Roberto Dell'Anno, 2022. "Theories and definitions of the informal economy: A survey," Journal of Economic Surveys, Wiley Blackwell, vol. 36(5), pages 1610-1643, December.
    13. Vanina Adoriana Trifan & Silviu Gabriel Szentesi & Lavinia Denisia Cuc & Mioara Florina Pantea, 2023. "Assessing Tax Compliance Behavior Among Romanian Taxpayers: An Empirical Case Study," SAGE Open, , vol. 13(3), pages 21582440231, September.
    14. Canh, Nguyen Phuc & Thanh, Su Dinh, 2020. "Financial development and the shadow economy: A multi-dimensional analysis," Economic Analysis and Policy, Elsevier, vol. 67(C), pages 37-54.
    15. Narciz Balasoiu & Iulian Chifu & Marian Oancea, 2023. "Impact of Direct Taxation on Economic Growth: Empirical Evidence Based on Panel Data Regression Analysis at the Level of Eu Countries," Sustainability, MDPI, vol. 15(9), pages 1-32, April.
    16. Dagmara Nikulin & Ewa Lechman, 2021. "Shadow Economy in Poland: Results of the Survey," SpringerBriefs in Economics, in: Shadow Economy in Poland, chapter 0, pages 49-65, Springer.
    17. Roberto Dell’Anno, 2023. "Measuring the unobservable: estimating informal economy by a structural equation modeling approach," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 30(1), pages 247-277, February.

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    More about this item

    Keywords

    Shadow economy; Tax evasion; MIMIC model; Currency demand approach; Romania;
    All these keywords.

    JEL classification:

    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance
    • E26 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Informal Economy; Underground Economy
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • C5 - Mathematical and Quantitative Methods - - Econometric Modeling

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