Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
5056609 | Economic Systems | 2013 | 11 Pages |
The enormous spread of the internet in the last 20 years has been having various economic consequences. In this paper I ask whether the spread of the internet aided or abetted the shadow economy. To this end, using a panel data of 152 countries over 9 years from 1999 to 2007, I examine the empirical relationship between the degree of internet usage and the size of the shadow economy. Panel and cross-section estimation results indicate that the association between internet usage and shadow economy size strongly interacts with GDP per-capita. I also suggest and then empirically test an economic mechanism to account for this observation.
⺠First paper linking internet usage to shadow economy. ⺠GDP per capita strongly interacts with this link. ⺠Results hold both for the whole dataset and subset with MENA countries.