Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/73240
Authors: 
Dreher, Axel
Schneider, Friedrich G.
Year of Publication: 
2006
Series/Report no.: 
Working Paper, Department of Economics, Johannes Kepler University of Linz 0603
Abstract: 
This paper analyzes the influence of the shadow economy on corruption and vice versa. We hypothesize that corruption and shadow economy are substitutes in high income countries while they are complements in low income countries. The hypotheses are tested for a crosssection of 120 countries and a panel of 70 countries for the period 1994-2002. Our results show that the shadow economy reduces corruption in high income countries, but increases corruption in low income countries. We also find that stricter regulations increase both corruption and the shadow economy.
Subjects: 
corruption
shadow economy
regulation
tax burden
JEL: 
D73
H26
O17
O5
Document Type: 
Working Paper

Files in This Item:
File
Size
306.36 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.