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Shadow Economy in the Business and Entrepreneurial Sectors

In: Formalizing the Shadow Economy in Serbia

Author

Listed:
  • Gorana Krstić

    (University of Belgrade)

  • Branko Radulović

    (University of Belgrade)

Abstract

Research to date on the shadow economy in South Eastern Europe and beyond has mainly focused on macro assessments of this phenomenon or on the socio-economic characteristics of individuals involved in these activities. There have been far fewer studies analysing the characteristics of businesses engaged in the shadow economy and the factors that drive them to operating informally. This chapter provides an analysis of the shadow economy in the business and entrepreneurial sectors using data from the Survey on Conditions for Doing Business in Serbia. This analysis is based on three indicators: (1) the share of business entities engaged in the shadow economy in the total number of business entities; (2) the share of informal workers in the total number of workers, both overall and by type; and (3) the share of cash payments in the total volume of payments. In addition to descriptive statistics that show how the shadow economy varies by key factors, the chapter provides econometric analysis identifying specific factors that are statistically significant in a company’s decision to take part in the shadow economy.

Suggested Citation

  • Gorana Krstić & Branko Radulović, 2015. "Shadow Economy in the Business and Entrepreneurial Sectors," Contributions to Economics, in: Gorana Krstić & Friedrich Schneider (ed.), Formalizing the Shadow Economy in Serbia, edition 127, chapter 0, pages 77-99, Springer.
    • Handle: RePEc:spr:conchp:978-3-319-13437-6_6
    DOI: 10.1007/978-3-319-13437-6_6
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    References listed on IDEAS

    as
    1. Gonzalez, Alvaro S. & Lamanna, Francesca, 2007. "Who fears competition from informal firms ? evidence from Latin America," Policy Research Working Paper Series 4316, The World Bank.
    2. Auerbach,Alan J. & Hines, Jr.,James R. & Slemrod,Joel (ed.), 2007. "Taxing Corporate Income in the 21st Century," Cambridge Books, Cambridge University Press, number 9780521870221, November.
    3. Tālis J. Putniņš & Arnis Sauka, 2011. "Size and determinants of shadow economies in the Baltic States," Baltic Journal of Economics, Baltic International Centre for Economic Policy Studies, vol. 11(2), pages 5-25, December.
    4. Hudson John & Williams Colin & Orviska Marta & Nadin Sara, 2012. "Evaluating the Impact of the Informal Economy on Businesses in South East Europe: Some Lessons from the 2009 World Bank Enterprise Survey," South East European Journal of Economics and Business, Sciendo, vol. 7(1), pages 99-110, April.
    5. Gorana Krstić & Peter Sanfey, 2011. "Earnings inequality and the informal economy," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 19(1), pages 179-199, January.
    6. Joel Slemrod, 2007. "Cheating Ourselves: The Economics of Tax Evasion," Journal of Economic Perspectives, American Economic Association, vol. 21(1), pages 25-48, Winter.
    7. Lindsay Tedds, 2010. "Keeping it off the books: an empirical investigation of firms that engage in tax evasion," Applied Economics, Taylor & Francis Journals, vol. 42(19), pages 2459-2473.
    8. Dan Andrews & Aida Caldera Sánchez & Åsa Johansson, 2011. "Towards a Better Understanding of the Informal Economy," OECD Economics Department Working Papers 873, OECD Publishing.
    9. Colin C. Williams, 2006. "The Hidden Enterprise Culture," Books, Edward Elgar Publishing, number 3948.
    10. Kyle, Steven C. & Warner, Andrew & Dimitrov, Lubomir & Krustev, Radoslav & Alexandrova, Svetlana & Stanchev, Krassen, 2001. "Measuring the Shadow Economy in Bulgaria," Working Papers 127656, Cornell University, Department of Applied Economics and Management.
    11. Guillermo E. Perry & William F. Maloney & Omar S. Arias & Pablo Fajnzylber & Andrew D. Mason & Jaime Saavedra-Chanduvi, 2007. "Informality : Exit and Exclusion," World Bank Publications - Books, The World Bank Group, number 6730.
    12. J. Scott Long & Jeremy Freese, 2006. "Regression Models for Categorical Dependent Variables using Stata, 2nd Edition," Stata Press books, StataCorp LP, edition 2, number long2.
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    Cited by:

    1. Ligita Gasparėnienė & Rita Remeikienė & Colin C. Williams, 2022. "Unemployment and the Informal Economy," SpringerBriefs in Economics, Springer, number 978-3-030-96687-4, February.
    2. Ligita Gasparėnienė & Rita Remeikienė & Colin C. Williams, 2022. "Theorizing the Informal Economy," SpringerBriefs in Economics, in: Unemployment and the Informal Economy, chapter 0, pages 7-60, Springer.

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