The competition between legal and illegal firms in the market: theoretical models and empirical evidence

The main aim of this paper is to study the phenomenon of the coexistence of firms with illegal characteristics and firms showing legal behaviour in developed economies by using an evolutionary competition model known as the Lotka-Volterra equations. Enterprises in a ‘legal system’ obey the extant la...

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Detalhes bibliográficos
Autores: Marino, Domenico, Timpano, Francesco, Gil Lafuente, Jaime
Formato: artículo
Estado:Versión publicada
Fecha de publicación:2023
País:España
Recursos:Universidad de Barcelona
Repositorio:Dipòsit Digital de la UB
OAI Identifier:oai:diposit.ub.edu:2445/212940
Acesso em linha:https://hdl.handle.net/2445/212940
Access Level:acceso abierto
Palavra-chave:Frau fiscal
Empreses
Empirisme
Investigació criminal
Tax evasion
Business enterprises
Empiricism
Criminal investigation
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spelling The competition between legal and illegal firms in the market: theoretical models and empirical evidenceMarino, DomenicoTimpano, FrancescoGil Lafuente, JaimeFrau fiscalEmpresesEmpirismeInvestigació criminalTax evasionBusiness enterprisesEmpiricismCriminal investigationThe main aim of this paper is to study the phenomenon of the coexistence of firms with illegal characteristics and firms showing legal behaviour in developed economies by using an evolutionary competition model known as the Lotka-Volterra equations. Enterprises in a ‘legal system’ obey the extant laws, particularly market rules, while enterprises in an ‘illegal system’ disregard them. Illegal enterprises have a competitive advantage over legal enterprises, yet they cannot survive if legal enterprises disappear completely. The numerical solution of the Lotka-Volterra equations are used to show how there can be a situation of coexistence between legal and illegal enterprises and how state intervention can help reduce illegality in an economic system. This paper outlines a new approach to address the problem of coexistence because it uses non-linear and evolutionary tools to define the competition between legal and illegal firms. The research gap presented in this paper is addressed using the predator-prey scheme to model the competition between legal and illegal firms, which is perceived as the competition between two populations with different fitness levels (survival probabilities). This competition gives rise to three different types of possible equilibrium outcomes: survival of only legal firms, survival of only illegal firms and coexistence of these two types of firms. An empirical analysis of an Italian case study confirms the results of this paper's theoretical model.Elsevier España2023info:eu-repo/semantics/articleinfo:eu-repo/semantics/publishedVersionapplication/pdfhttps://hdl.handle.net/2445/212940Articles publicats en revistes (Empresa)reponame:Dipòsit Digital de la UBinstname:Universidad de BarcelonaInglésReproducció del document publicat a: https://doi.org/10.1016/j.iedeen.2023.100228European Research on Management and Business Economics, 2023, vol. 29, num.3, p. 01-09https://doi.org/10.1016/j.iedeen.2023.100228cc-by-nc-nd (c) Marino, D. et al., 2023http://creativecommons.org/licenses/by-nc-nd/4.0/info:eu-repo/semantics/openAccessoai:diposit.ub.edu:2445/2129402026-05-27T06:46:51Z
dc.title.none.fl_str_mv The competition between legal and illegal firms in the market: theoretical models and empirical evidence
title The competition between legal and illegal firms in the market: theoretical models and empirical evidence
spellingShingle The competition between legal and illegal firms in the market: theoretical models and empirical evidence
Marino, Domenico
Frau fiscal
Empreses
Empirisme
Investigació criminal
Tax evasion
Business enterprises
Empiricism
Criminal investigation
title_short The competition between legal and illegal firms in the market: theoretical models and empirical evidence
title_full The competition between legal and illegal firms in the market: theoretical models and empirical evidence
title_fullStr The competition between legal and illegal firms in the market: theoretical models and empirical evidence
title_full_unstemmed The competition between legal and illegal firms in the market: theoretical models and empirical evidence
title_sort The competition between legal and illegal firms in the market: theoretical models and empirical evidence
dc.creator.none.fl_str_mv Marino, Domenico
Timpano, Francesco
Gil Lafuente, Jaime
author Marino, Domenico
author_facet Marino, Domenico
Timpano, Francesco
Gil Lafuente, Jaime
author_role author
author2 Timpano, Francesco
Gil Lafuente, Jaime
author2_role author
author
dc.subject.none.fl_str_mv Frau fiscal
Empreses
Empirisme
Investigació criminal
Tax evasion
Business enterprises
Empiricism
Criminal investigation
topic Frau fiscal
Empreses
Empirisme
Investigació criminal
Tax evasion
Business enterprises
Empiricism
Criminal investigation
description The main aim of this paper is to study the phenomenon of the coexistence of firms with illegal characteristics and firms showing legal behaviour in developed economies by using an evolutionary competition model known as the Lotka-Volterra equations. Enterprises in a ‘legal system’ obey the extant laws, particularly market rules, while enterprises in an ‘illegal system’ disregard them. Illegal enterprises have a competitive advantage over legal enterprises, yet they cannot survive if legal enterprises disappear completely. The numerical solution of the Lotka-Volterra equations are used to show how there can be a situation of coexistence between legal and illegal enterprises and how state intervention can help reduce illegality in an economic system. This paper outlines a new approach to address the problem of coexistence because it uses non-linear and evolutionary tools to define the competition between legal and illegal firms. The research gap presented in this paper is addressed using the predator-prey scheme to model the competition between legal and illegal firms, which is perceived as the competition between two populations with different fitness levels (survival probabilities). This competition gives rise to three different types of possible equilibrium outcomes: survival of only legal firms, survival of only illegal firms and coexistence of these two types of firms. An empirical analysis of an Italian case study confirms the results of this paper's theoretical model.
publishDate 2023
dc.date.none.fl_str_mv 2023
dc.type.none.fl_str_mv info:eu-repo/semantics/article
info:eu-repo/semantics/publishedVersion
format article
status_str publishedVersion
dc.identifier.none.fl_str_mv https://hdl.handle.net/2445/212940
url https://hdl.handle.net/2445/212940
dc.language.none.fl_str_mv Inglés
language_invalid_str_mv Inglés
dc.relation.none.fl_str_mv Reproducció del document publicat a: https://doi.org/10.1016/j.iedeen.2023.100228
European Research on Management and Business Economics, 2023, vol. 29, num.3, p. 01-09
https://doi.org/10.1016/j.iedeen.2023.100228
dc.rights.none.fl_str_mv cc-by-nc-nd (c) Marino, D. et al., 2023
http://creativecommons.org/licenses/by-nc-nd/4.0/
info:eu-repo/semantics/openAccess
rights_invalid_str_mv cc-by-nc-nd (c) Marino, D. et al., 2023
http://creativecommons.org/licenses/by-nc-nd/4.0/
eu_rights_str_mv openAccess
dc.format.none.fl_str_mv application/pdf
dc.publisher.none.fl_str_mv Elsevier España
publisher.none.fl_str_mv Elsevier España
dc.source.none.fl_str_mv Articles publicats en revistes (Empresa)
reponame:Dipòsit Digital de la UB
instname:Universidad de Barcelona
instname_str Universidad de Barcelona
reponame_str Dipòsit Digital de la UB
collection Dipòsit Digital de la UB
repository.name.fl_str_mv
repository.mail.fl_str_mv
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score 15,812429

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