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Internet usage and the shadow economy: Evidence from panel data

Ceyhun Elgin

Economic Systems, 2013, vol. 37, issue 1, pages 111-121

Abstract: 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.

Keywords: Shadow economy; Internet usage; Panel-data (search for similar items in EconPapers)
JEL-codes: E26 O17 O30 (search for similar items in EconPapers)
Date: 2013
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Working Paper: Internet Usage and the Shadow Economy: Evidence from Panel Data (2012) Downloads
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