Shadow economy and national culture: A spatial approach

This paper seeks to contribute to the empirical evidence on existing estimations of the factors partici¬pating in shadow economy. The estimations correspond to the period 1999-2015, with a sample of 82 countries. The paper examines the effect of the Hofstede cultural variables, along with other socioeconomic fac¬tors on the shadow economy, and incorporates the spatial variable as an additional explanatory variable. The estimation carried out as a novelty uses a panel model that incorporates the spatial filter technique. Our study confirms that national culture and how developed a country is are significant factors in ex¬plaining the different levels of shadow economies.