Study of Incentives, Characteristics and Strategies of Firms Operating ‘in the Shadows’

The overview of existing research into South East European (SEE) informal economy reveals that it is significant in both size and role.

Going beyond generalized figures, our primary goal is to analyse how this environment shapes firms’ behaviour and derive relevant conclusions with regard to EU integration. 

Therefore the survey focus is on the incentives to engage in informal activities and the resulting characteristics of company organization and strategy.  As Feige (2001) puts it, “if we are to understand why some transitions have been relatively rapid and successful while others have languished and suffered from huge adjustment costs, we must examine how each society has structured the relative incentives for productive, protective, and predatory behaviours.”