Authors : Dandoulaki Panagiota

Volume/Issue : Volume 11 - 2026, Issue 3 - March

Google Scholar : https://tinyurl.com/4rks7bn4

Scribd : https://tinyurl.com/d4fftbp5

DOI : https://doi.org/10.38124/ijisrt/26mar480

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Abstract : This paper examines the correlation concerning national cultural dimensions and the shadow economy. Present in all countries, the shadow economy significantly influences economic development, prompting researchers to explore the factors that affect its magnitude. However, existing literature has largely neglected the association between national culture and the shadow economy. To investigate this connection, we will utilize regression analysis in conjunction with Hofstede's cultural dimensions. The volume of the shadow economy, expressed as a percentage of GDP, was evaluated using the MIMIC and CDA methods. Our correlation analysis reveals associations between the shadow economy and several cultural dimensions, including power distance, uncertainty avoidance, individualism versus collectivism, and longterm versus short-term normative orientation. Our contribution to the literature provides empirical evidence that cultural factors can elucidate the magnitude of the shadow economy across different countries. Based on our findings, we underscore the importance of cultivating national culture to mitigate the shadow economy. The identified relationships between the shadow economy and specific cultural dimensions deserves further investigation.

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