Scope, structure and impact of the shadow economy of the Czech Republic on its public economy between the years 2004 – 2013 and its comparison in terms of EU countries

This bachelor thesis analyses the structure and size of the shadow economy across the EU and focuses primarily on the case of the Czech Republic. Work presents the main causes of the growth of the shadow economy. These are followed by a list of estimation methods, which are analysed under the value-neutral analysis. In terms of structure, shadow economies of selected EU countries are divided to the industry subsectors. Sectors with the highest incidence of shadow activities are construction and manufacturing industries. Furthermore, the thesis analyses the pre-crisis and post-crisis trends of shadow economies, the observations show that the shadow economy in Europe long-term declines. A partial conclusion is that the development of EU shadow economy is significantly influenced by economic cycles. The main outcome of this work is the empirical observation that there is a strong negative correlation between the number of electronic transactions per capita and the size of shadow economies. This fact is actually relevant for the Czech Republic, because the utilising of electronic payments is below EU average. Hence liberal proceedings to promote electronic transactions seem to have great potential in the Czech Republic.