Global cryptocurrency use, corruption, and the shadow economy: New insights into the underlying linkages.

The recent prevalence of digital currencies has challenged policymakers as they try to control the supply of money and rein in clandestine activities. Corruption and shadow economy are widely prevalent illegal/unobserved activities that have been hard to eliminate worldwide. These longstanding and e...

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Publicado en:American Journal of Economics & Sociology Vol. 83; no. 3; pp. 609 - 630
Autores principales: Berdiev, Aziz N., Goel, Rajeev K., Saunoris, James W.
Formato: Artículo
Publicado: Wiley-Blackwell May2024
Materias:
Acceso en línea:Ver este registro en EBSCOhost
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      dt: May2024
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        atl: Global cryptocurrency use, corruption, and the shadow economy: New insights into the underlying linkages.
      aug:
        au:
          Berdiev, Aziz N.
          Goel, Rajeev K.
          Saunoris, James W.
        affil:
          Bryant University, Smithfield Rhode Island,, USA
          Katie School of Insurance and Risk Management, Illinois State University, Normal Illinois,, USA
          Kiel Institute for the World Economy, Kiel, Germany
          Institute for Studies on the Mediterranean, National Research Council, Napoli, Italy
          Eastern Michigan University, Ypsilanti Michigan,, USA
      su:
        Informal sector
        Money supply
        Corruption
        Cryptocurrencies
        Digital currency
      sug:
        subj:
          Informal sector
          Money supply
          Corruption
          Cryptocurrencies
          Digital currency
      ab: The recent prevalence of digital currencies has challenged policymakers as they try to control the supply of money and rein in clandestine activities. Corruption and shadow economy are widely prevalent illegal/unobserved activities that have been hard to eliminate worldwide. These longstanding and entrenched activities have possibly found a new avenue to thrive and evade detection/punishment. So disentangling the nexus between corruption, shadow economy, and digital currencies is important. Using recent cross‐country data, this paper analyzes the interrelationships between corruption, shadow economy, and cryptocurrencies. We argue that a large underground sector in a nation provides a mechanism through which corrupt government officials use cryptocurrencies to conceal their unauthorized earnings. Employing formal mediation analysis, our results show that the positive nexus between corruption and cryptocurrency adoption is mediated by the shadow sector. Quantitatively speaking, three‐fourths of the correlation between corruption and cryptocurrency usage is mediated by the shadow economy. The primary implication of our findings is that effective monitoring of cryptocurrencies should pay attention to policies to control both corruption and the shadow economy.
      pubtype: Academic Journal
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    language: English
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