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National Interests: Priorities and Security
 

Evaluating the informal economic order of the Ural Economic Region

Vol. 13, Iss. 9, SEPTEMBER 2017

PDF  Article PDF Version

Received: 14 July 2017

Received in revised form: 30 July 2017

Accepted: 22 August 2017

Available online: 2 October 2017

Subject Heading: ECONOMIC SECURITY

JEL Classification: С13, С18, D24, Е01, Е26

Pages: 1676–1691

https://doi.org/10.24891/ni.13.9.1676

Letaeva T.V. South Ural State University, Сhelyabinsk, Russian Federation
T.Letaeva@gmail.com

Popova E.A. South Ural State University, Сhelyabinsk, Russian Federation
elena-rus2012@yandex.ru

Importance The Ural Economic Region consists of seven regions pertaining to two federal districts. It is an illustrative example of the asymmetry of socio-economic indicators within the single territorial unit. The research deals with the informal economic order in the Ural Economic Region.
Objectives The research evaluates the informal economy of the Ural Economic Region by assessing the concealed production for 2008–2015.
Methods The proposed method relies upon the hypothesis stating that the entity attributes all informal production costs to activities, which are reported in official financial statements. Hence, total production and selling costs include expenses for official accountable activities and concealed production.
Results The analysis found the informal production differed throughout entities of the Ural Economic Region. After we compared the resultant figures with official statistical data, we figured out that percentage of the employed in informal production was low in the industrially developed areas, where the level of informal production was rather high, while production profitability was the lowest statistically. The production profitability and informal employment are high in the less industrially developed regions, with the level of concealed production being low.
Conclusions and Relevance The resulting figures were compared with results of other researches, thus verifying and validating the proposed method. Whereas publicly available data are used, this method can be applied to analyze the informal economic order at various levels of territorial architecture.

Keywords: informal economy, economic order, shadow economy, production concealment

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