Title: A comparative analysis in the EU shadow economy using a DEA model

Authors: Claudio Quintano; Paolo Mazzocchi

Addresses: Department of Management and Quantitative Studies, University of Naples Parthenope, Via G. Parisi 13, 80132 Napoli, Italy ' Department of Management and Quantitative Studies, University of Naples Parthenope, Via G. Parisi 13, 80132 Napoli, Italy

Abstract: The idea of this study is to employ the data envelopment analysis (DEA) to assess the relative efficiency of 32 European countries in order to compare their performances while dealing with the shadow economy (SE). To statistically validate the model, the DEA refers to the results obtained by performing a structural equation model (SEM) partial least squares (PLS) approach. The authors adopt an input-minimisation orientation based on the assumption that, during the considered period, the policy interventions are able to focus strategically on the dimensions used to estimate the SEM-PLS model. The non-parametric frontier can be used to interpret the taxation and regulation differentials in the countries considered and the results can be interpreted in terms of encouraging the interventions when referring to the indicators proposed in the model.

Keywords: EU shadow economy; data envelopment analysis; DEA; structural equation modelling; SEM; public policy; European Union; partial least squares; PLS; taxation differentials; regulation differentials.

DOI: 10.1504/GBER.2016.076255

Global Business and Economics Review, 2016 Vol.18 No.3/4, pp.445 - 468

Received: 10 Feb 2015
Accepted: 10 Feb 2015

Published online: 29 Apr 2016 *

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