HOW PARTICIPATING IN THE SHADOW ECONOMY AFFECTS THE GROWTH OF LATVIAN FIRMS

Nino Kokashvili, Irakli Barbakadze and Ketevani Kapanadze

No 101, University of Tartu - Faculty of Economics and Business Administration Working Paper Series from Faculty of Economics and Business Administration, University of Tartu (Estonia)

Abstract: This paper examines the relationship between the growth of Latvian firms and their involvement in the shadow economy in 2015. When up to 10% of the overall economic activity of firms is in the shadow economy, this had a growth-enhancing effect on firms that recorded non-positive growth during the last five years. Using the perceptions of corruption and interview languages as instruments of measuring the shadow economy participation rate, the authors conclude that there is a positive relationship between perceptions of corruption and the shadow economy participation rate.

Keywords: Shadow Economy; Firm Growth; Company Managers; Latvia (search for similar items in EconPapers)
JEL-codes: D22 E24 E26 J28 J46 O17 (search for similar items in EconPapers)
Pages: 28 pages
Date: 2017
New Economics Papers: this item is included in nep-cis, nep-iue, nep-mac and nep-tra
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Persistent link: https://EconPapers.repec.org/RePEc:mtk:febawb:101

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