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Title:
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Does the EU financing system contribute to shadow economic activity?
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Author:
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Herwartz, Helmut; Theilen, Bernd
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Other authors:
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Universitat Rovira i Virgili. Departament d'Economia; Universitat Rovira i Virgili. Centre de Recerca en Economia Industrial i Economia Pública |
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Resum:
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Financial contributions to the EU budget depend basically on official GDP. This means that countries with
higher shadow economic activity contribute less than they should contribute in a system based on actual GDP
and therefore could reduce their incentive to fight against such activities. In this paper we investigate if the EU
financing system really has an influence on the intensity with which governments in EU member states fight
against shadow economic activity. We find that the EU net contributors significantly fight more intensively
against shadow economic activity while EU net receivers significantly fight less. As a result, shadow economic
activity is higher in net receiver and lower in net contributor countries than it were in comparison with a scenario
of nationally balanced EU funding. Quantitatively and averaged over the time period 2001-2007, the diagnosed
effect amounts to a stimulation of hidden economic activity by almost 10% for particular economies.
JEL classification: C31, D63, F33, H21, H26.
Keywords: EU financing system, shadow economy, tax auditing. |
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Publication date:
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2011 |
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Subject (UDC):
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339 - Comerç. Relacions econòmiques internacionals. Economia mundial. Màrqueting |
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Subject(s):
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Finances públiques -- Unió Europea, Països de la
Pressupost -- Unió Europea, Països de la
Economia submergida |
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Rights:
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Aquest document està subjecte a una llicència d'ús de Creative Commons, amb la qual es permet copiar, distribuir i comunicar públicament l'obra sempre que se'n citin l'autor original, la universitat i el departament i no se'n faci cap ús comercial ni obra derivada, tal com queda estipulat en la llicència d'ús (http://creativecommons.org/licenses/by-nc-nd/2.5/es/) |
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Document type:
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Working Paper |
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ISSN:
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1988 - 0812
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Collection:
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Documents de treball del Departament d'Economia;2011-16
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Share:
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