The shadow economy in Vietnam: Estimates using the MIMIC approach

Dat Van Luong, Tien Van Nguyen and Ha Nguyen Ngoc To

Economic Affairs, 2026, vol. 46, issue 2, 313-336

Abstract: This study provides an updated province‐specific measurement of the informal sector in Vietnam and identifies critical macroeconomic factors shaping its growth. It uses a Multiple Indicators Multiple Causes (MIMIC) model to estimate the size and determinants of Vietnam's shadow economy from 2015 to 2022. Results reveal that the shadow economy accounted for an average of just over 20 per cent of provincial Gross Regional Domestic Product (GRDP) in 2022, up from 17.7 per cent in 2015. Key drivers in the model include revenue from enterprises and individuals, personal income tax, GDP per capita, foreign direct investment, provincial competitiveness and governance indices. The informal economy significantly influences regional economies, employment, social and unemployment insurance participation, income inequality, and household usage of electricity.

Date: 2026
References: Add references at CitEc
Citations:

Downloads: (external link)
https://doi.org/10.1111/ecaf.70040

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bla:ecaffa:v:46:y:2026:i:2:p:313-336

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=0265-0665

Access Statistics for this article

Economic Affairs is currently edited by Philip Booth

More articles in Economic Affairs from Wiley Blackwell
Bibliographic data for series maintained by Wiley Content Delivery ().