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Defining the Concept of the Shadow Economy in the Context of Contemporary Economic Processes
Zelinska Y. Y., Budіakova О. Y.

Zelinska, Yelyzaveta Yu., and Budіakova, Оlena Yu. (2025) “Defining the Concept of the Shadow Economy in the Context of Contemporary Economic Processes.” Business Inform 12:21–30.
https://doi.org/10.32983/2222-4459-2025-12-21-30

Section: Economic Theory

Article is written in English
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UDC 330.5:338.242.2

Abstract:
The aim of the article is to conduct a comprehensive theoretical and methodological analysis of approaches to defining the shadow economy and to develop a contemporary authorial concept that reflects the impact of digital transformation and the emergence of new forms of shadow activities. By systematizing and summarizing scientific research, the article examines the evolution and main categories of interpretations of the shadow economy, highlighting the increasing complexity of this phenomenon under modern conditions. The research results reveal new directions of shadow processes driven by digitalization and global financial flows, demonstrating how new technologies transform traditional methods of concealing and reallocating economic resources. It is substantiated that these changes require an updated theoretical framework and a reconsideration of the State regulatory mechanisms, particularly in the areas of digital finance and cross-border operations. The article proposes an original definition of the shadow economy as a system of deliberately hidden, informal, and partially legal economic processes integrated into the formal sector through financial, labor, and digital networks. This broader interpretation takes into account new digital realities and the complex interplay between legal and illegal economic activities, reflecting the hybrid and networked nature of modern practices of shadowing. The study highlights that digital technologies not only create new channels for shadow economic activity but also open up additional opportunities for improving monitoring and control. Future research prospects include clarifying the structure of digital segments of shadow economic activity, developing methods for their quantitative measurement, and applying big data and algorithmic monitoring to enhance the effectiveness of de-shadowing policies in the digital economy, ensuring greater transparency and institutional resilience.

Keywords: shadow economy, digitalization, informal sector, fiscal regulation, institutional approaches, globalization, economy formalization.

Fig.: 1. Tabl.: 1. Bibl.: 28.

Zelinska Yelyzaveta Yu. – Postgraduate Student, Department of Economics, Kyiv National University of Technologies and Design (2 Mala Shiianovska Str., Kyiv, 01011, Ukraine)
Email: [email protected]
Budіakova Оlena Yu. – Candidate of Sciences (Economics), Associate Professor, Associate Professor, Department of Economics, Kyiv National University of Technologies and Design (2 Mala Shiianovska Str., Kyiv, 01011, Ukraine)
Email: [email protected]

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