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Determinants of shadow economy in transition countries: economic and environmental aspects

Author

Listed:
  • Oleksii Lyulyov
  • Maksym Paliienko
  • Lesia Prasol
  • Tetyana Vasylieva
  • Oleksandra Kubatko
  • Victoria Kubatko

Abstract

The paper analyses the drivers of shadow economy within the transition economies. It was found that an increase in GDP per capita in a selected group of transition economies by 10% decreases the shadow economy levels by 1.2%; increase in foreign direct investment by 10% shrinks the shadow economy sector by 0.5%; improvements in energy efficiency by 10% are correlated with 2% shadow economy growth. It was also found that an increase in tax level by 10% increases the shadow economy by 1%. The relevant policy implication for transition economies is to stimulate the economic growth supplemented by increase in efficiency of the tax bodies. The separate policy measure for the transition economies is be to reform the structure of the tax system in the direction of higher portion of indirect taxes. The findings suggest that an increase in shadow economy reduces the life expectancy in the selected transition economies.

Suggested Citation

  • Oleksii Lyulyov & Maksym Paliienko & Lesia Prasol & Tetyana Vasylieva & Oleksandra Kubatko & Victoria Kubatko, 2021. "Determinants of shadow economy in transition countries: economic and environmental aspects," International Journal of Global Energy Issues, Inderscience Enterprises Ltd, vol. 43(2/3), pages 166-182.
    • Handle: RePEc:ids:ijgeni:v:43:y:2021:i:2/3:p:166-182
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    Citations

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    Cited by:

    1. Yuriy Bilan & Yaryna Samusevych & Serhiy Lyeonov & Marcin Strzelec & Iryna Tenytska, 2022. "The Keys to Clean Energy Technology: Impact of Environmental Taxes on Biofuel Production and Consumption," Energies, MDPI, vol. 15(24), pages 1-22, December.
    2. Nguyen, Canh Phuc & Nguyen, Binh Quang, 2023. "Environmental foe or friend: The influence of the shadow economy on forest land," Land Use Policy, Elsevier, vol. 124(C).
    3. Łukasz Skowron & Olena Chygryn & Marcin Gąsior & Vitaliia Koibichuk & Serhiy Lyeonov & Serhii Drozd & Oleksandr Dluhopolskyi, 2023. "Interconnection between the Dynamic of Growing Renewable Energy Production and the Level of CO 2 Emissions: A Multistage Approach for Modeling," Sustainability, MDPI, vol. 15(12), pages 1-19, June.
    4. Rina Astini & Kehkashan Ishrat & Yanto Ramli & Tafiprios Tafiprios & Kwong Wing Chong & Ooi Chee Keong, 2023. "Nexus among Crypto Trading, Environmental Degradation, Economic Growth and Energy Usage: Analysis of Top 10 Cryptofriendly Asian Economies," International Journal of Energy Economics and Policy, Econjournals, vol. 13(5), pages 339-347, September.
    5. Ahmad, Waqar & Hussain, Babar, 2023. "Fiscal Policy Effects on Shadow Economy: Empirical Evidence from Developing Countries," Asian Journal of Applied Economics, Kasetsart University, Center for Applied Economics Research, vol. 30(2), July.
    6. Radosław Miśkiewicz & Krzysztof Matan & Jakub Karnowski, 2022. "The Role of Crypto Trading in the Economy, Renewable Energy Consumption and Ecological Degradation," Energies, MDPI, vol. 15(10), pages 1-15, May.
    7. Sarsen Zhanabekov, 2022. "Robust determinants of the shadow economy," Bulletin of Economic Research, Wiley Blackwell, vol. 74(4), pages 1017-1052, October.

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