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Corruption and the shadow economy: an empirical analysis

Open access
Dreher, Axel, Schneider, Friedrich·2010·Public Choice

Abstract

This paper analyzes the influence of the shadow economy on corruption and vice versa. We hypothesize that corruption and the shadow economy are substitutes in high income countries while they are complements in low income countries. The hypotheses are tested for a cross-section of 98 countries. Our results show that there is no robust relationship between corruption and the size of the shadow economy when perceptions-based indices of corruption are used. Employing an index of corruption based on a structural model, however, corruption and the shadow economy are complements in countries with low income, but not in high income countries.

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Metadata

Authors
Dreher, A., & Schneider, F.
Venue
Public Choice
Published
2009-09-29
Volume
144
Issue
1-2
Pages
215-238
ISSN
  • 0048-5829 (ISSN-L)
  • 1573-7101
OpenAlex
W2001659623
Cited by
646
References
4
FWCI
58.61
Type
journal article
Language
en
Open access
hybrid

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CoChat. (2026). Citation check: Corruption and the shadow economy: an empirical analysis. https://app.cochat.ai/papers/10.1007/s11127-009-9513-0
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Dreher, A., & Schneider, F. (2010). Corruption and the shadow economy: an empirical analysis. Public Choice. https://doi.org/10.1007/s11127-009-9513-0

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