@TechReport{iza:izadps:dp4182, author={Buehn, Andreas and Schneider, Friedrich}, title={Corruption and the Shadow Economy: A Structural Equation Model Approach}, year={2009}, month={May}, institution={Institute of Labor Economics (IZA)}, address={Bonn}, type={IZA Discussion Paper}, number={4182}, url={https://www.iza.org/index.php/publications/dp4182}, abstract={The relationship between corruption and the shadow economy is not clear. Theoretically, they either substitute or complement each other – exhibiting either a negative or positive relationship. This paper – using a structural equation model with two latent variables – extracts information on various dimensions of corruption and the shadow economy to contribute to the debate on their relationship. It presents empirical evidence of a positive relationship between the shadow economy and corruption. The results show that the shadow economy influences corruption more than corruption influences the shadow economy.}, keywords={shadow economy;corruption;SEM models}, }