Factors Fostering Shadow Economy Performance in Poland and Lithuania during 2000-2019

This study relies on a calculable and essential analysis of statistically oriented regression model. Ninety-five variables taken into consideration in this research were grouped four categories. The first category covers the general macroeconomic situation, second is devoted to crime, third formed by characteristics income living conditions, fourth one applies taxation system. Multiple Indicators Causes (MIMIC) model was employed measure level shadow economy Poland Lithuania during 2000-2019. MIMIC depends Structural Equation Models. approach allows assess as latent variable. observed factors are government employment/labor force, tax burden, subsides/GDP, social benefits paid government/GDP, self-employment/GDP, unemployment rate. Pearson correlation index used size up between independent variables, Kolmogorov–Smirnov (KS) test for normality residuals applied. In both countries, affecting performance show great similarity. development fostered many different factors, related to, but not limited situation. fact, economic situation associated with standard living, well crime Important results demonstrate that can be predict Lithuania. Such information facilitates taking adequate steps order minimize countries. implications very useful decision makers shaping legal progress