| Variable | Definition | Source |
| Size | Expresses the share of the informal economy in the GDP. It is calculated according to the Multiple Indicators Multiple Causes (MIMIC) econometric method. An increase in this variable also reflects a relatively larger size of the informal sector in the country. | Schneider et al. (2010) |
| Corruption | Measurement of corruption in the governance system, particularly in terms of bribes and special and unusual payments met by businesses. Corruption scores range from 0 to 6, with 0 designating a very high level of corruption and 6 a level of zero corruption. | International Country Risk Guide (ICRG, 2012) |
| Governance | This is a composite index of the quality and stability of political institutions. It is calculated on the basis of the main component analysis of the main indicators of quality of the political institutions of the ICRG (2012). By construction, an increase in this variable indicates a better quality of political governance. | Calculated by the author, using data from ICRG (2012) |
| Economic_freedom | Composite indicator of economic freedom calculated from the principal components analysis of the economic freedom variables of the Heritage Foundation base (2016). An increase in this variable reflects more economic freedom, thus less economic and financial regulation | Calculated by the author, using data from Heritage Fundation (2016) |
| Unemployment | Measure of the unemployment rate, i.e. the share of the non-employed labor force in the total labor force. | International Labor Office |
| GDP_percapita | It is a measure of national income divided by the number of people in the country. By construction, the larger this variable, the higher the level of development of the country. | World Development Indicators (WDI, 2015) |
| Voice _and_accountability (VA) | Measurement of freedom of expression and inclusion of citizens in the decision-making process and governance system. The larger it is, the more inclusive development and governance strategies are, which increases their effectiveness | World Governance Indicators (WGI, 2015) |
| Political_stability_and_violence (PIV) | Evaluates the risk of violence and abrupt and unexpected change in government. The higher the score the lower the risk and therefore the better the quality of governance. | World Governance Indicators (WGI, 2015) |
| Government_effectiveness (GE) | Translates the effectiveness of government in the conduct of public affairs and the quality of public service. A more effective government has a better score | World Governance Indicators (WGI, 2015) |
| Rule_of_law (ROL) | Measures trust and respect for political and judicial institutions by citizens. A higher score is associated with better respect for the rule of law | World Governance Indicators (WGI, 2015) |
| Control_of_corruption (COC) | It expresses the extent to which public action related to the rules and functioning of public administration promotes corruption. Higher ranking is given to countries with better control of corruption | World Governance Indicators (WGI, 2015) |
| Regulatory_quality (RQ) | It is the measure of the quality of governance in the sense of enabling an environment conducive to the development of the private sector. Higher ranking is given to countries with better regulation | World Governance Indicators (WGI, 2015) |