Behind the GDP: some remarks on the shadow economy in Mediterranean countries

Claudio Quintano and Paolo Mazzocchi ()
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Claudio Quintano: University of Naples “Parthenope”
Paolo Mazzocchi: University of Naples “Parthenope”

European Journal of Law and Economics, 2018, vol. 45, issue 1, No 6, 147-173

Abstract: Abstract It is common knowledge that in the past decades the focus on the shadow economy (SE) has increased and the range in the estimated size of this phenomenon is very divergent. The comprehensive coverage of economic production is important in order to ensure good quality of national accounts and exhaustive estimates of the gross domestic product. The purpose of this paper is to approach the SE by means of the latent variable method and the structural equation model–partial least squares and to explore similar behaviors in terms of the obtained results, by analyzing the subsamples of the countries under observation. Political measures need to be implemented carefully to counter the effects of the SE and policy-makers should have to adopt economic policy practices to drive the SE into the formal economy, particularly in less-developed countries.

Keywords: Shadow economy; Non-observed economy; Structural equation model; Partial least squares; Latent variable method; Mediterranean countries (search for similar items in EconPapers)
JEL-codes: E26 O17 (search for similar items in EconPapers)
Date: 2018
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DOI: 10.1007/s10657-014-9434-3

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