Digitalization and development of shadow economy in Russian agriculture

In the context of digital transformation, the analysis of the development of the shadow economy in agriculture in relation to the level of digitalization is of particular importance. The aim is to identify the impact of digitalization on the scale of the shadow economy in the Russian agriculture. Modeling using panel data for 78 constituent entities of the Russian Federation makes it possible to determine the impact of digitalization on the shadow transactions of legal entities in agriculture of the Russian Federation. The article uses the level of digitalization of the local telephone network in rural areas as an indicator of digitalization, since it covers urban and rural areas combined in a regional context across Russia, in contrast to other indicators presented in statistical sources. The differentiation of regions is strongly expressed in terms of the level of digitalization, while in terms of the level of the shadow economy it is weaker. This is due to the methodology taking into account shadow transactions only among legal entities, without entities in the informal sector. In the subjects of the Central, Southern and Siberian Federal Districts, the scale of the shadow economy in agriculture tends to decrease, while the level of digitalization, on the contrary, increases. The study econometrically proves that digitalization helps reduce the scale of the shadow economy in agriculture. The fixed effects model showed the greatest reliability. All other things being equal, an increase in the level of digitalization of the local telephone network in rural areas by 1% leads to a decrease in the share of shadow transactions of legal entities in relation to the gross added value of section A of OKVED by an average of 0.3 percentage points. This connection is explained by the fact that digitalization makes some operations in the circulation of products transparent, making shadow circulation more difficult.