There is considerable debate over the effects of both corruption and shadow economy on growth, but few studies have considered how the interaction between them might affect economic growth. We study how corruption levels in public administration affect economic growth and how this effect depends on the shadow economy. Using Ordinary Least Squares (OLS), fixed effects, and system generalized method of moments (GMM) on a dataset of 34 OECD countries over the period 1995-2014. The estimation results indicate that increased corruption and a larger shadow economy lead to decrease in economic growth. Results additionally indicate that the shadow economy magnifies the effect of corruption on economic growth. These results imply significant complementarities between corruption and the shadow economy, suggesting that the reduction of corruption will lead to a fall in the size of the shadow economy and will also reduce the negative effects of corruption on economic growth through the underground economy.

Purpose This paper aims to explore the impact of information communication technology (ICT) use and government efficiency on the economic growth. It assesses empirically the impact of government success in ICT promotion and government efficiency to enhance economic growth and catalyzing corruption control through technology adoption. Design/methodology/approach This paper examines the relationship between ICT and economic growth in a large sample of 149 countries for the period 2012–2016. The empirical evidence is based on the generalized method of moments. Findings There is a significant relationship between e-government development, ICT development and institutional quality, and not ICT development and corruption. The empirical results show that a negative value of the interaction suggests that the impact of corruption on economic growth is smaller for countries with a higher level of technology adoption. Practical implications The differences in e-government success across countries in the world are influenced by the digital divide due to income and corruption control level. Originality/value The efficiency of technology adoption and promotion will ensure stronger effects of corruption control on economic growth. Relevant practical implications derive from the research that can guide public policy in the area of e-government.

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