ŠEŠĖLINĘ EKONOMIKĄ LEMIANČIŲ VEIKSNIŲ TYRIMAS / FACTORS THAT DETERMINE SHADOW ECONOMY IN LITHUANIA AND EUROPE

Abstract

The problem of the shadow economy exists in the majority of countries and, depending on its scale, affects the economic development of the state, the social well­being of companies and the population and the country’s policy. This economy distorts competition, has a negative impact on the country’s tax system and its structure and the distribution of state revenue becomes unregulated and distorted. This economic activity alters official statistics so a policy based on it can become simply irrational and ineffective. All this leads to a change in government­funded general budget revenue and slows down the country’s economic growth. The purpose of this article is to identify and evaluate the factors that influence the shadow economy in Lithuania and across Europe. Objectives: to analyse the factors influencing the shadow economy after the analysis of the scientific literature, to develop a methodology that will be used for the assessment of the shadow economy factors, based on the presented methodology prepare calculations about the estimation of shadow economy factors. The following methods were used for the research: analysis of scientific literature, correlation, pair regression and multiple regression analysis. The results have shown that average salary, levels of poverty and corruption in the country, compulsory taxes and inflation have the greatest impact on the country’s shadow economy.