Economic determinants of cybercrime in India: a state-level panel data analysis

Purpose This study aims to examine the macroeconomic determinants of cybercrime across Indian states from 2017 to 2022, focusing on unemployment, inflation and education expenditure, contextualized within India’s unique socioeconomic and digital landscape. Design/methodology/approach Using a balanced panel data set of 29 states and union territories, this study uses a two-step system generalized method of moments estimator to address endogeneity and dynamic persistence. Data is sourced from the National Crime Records Bureau, the Ministry of Education and the Periodic Labour Force Survey. Findings The most robust finding is the strong persistence of cybercrime, indicating its self-reinforcing nature. Contrary to traditional criminological theories, the results show that broad macroeconomic factors like unemployment and inflation are not significant direct drivers of cybercrime at the state level. The discussion provides insightful explanations for these null findings, highlighting the critical mediating role of India’s digital divide and the double-edged sword of education, which can simultaneously increase capability for offending and opportunity for victimization. Research limitations/implications The study is limited by its reliance on official crime data, which may reflect reporting efficiency rather than actual incidence. The omission of variables like internet penetration due to data unavailability is a constraint. Future research should integrate direct measures of digital infrastructure and literacy. Practical implications Policy responses should prioritize long-term strategies to dismantle persistent criminal networks through specialized cyber units and improved inter-agency coordination. Educational policy must integrate cybersecurity awareness and ethics training to mitigate the risks associated with advanced digital literacy. Rather than generic economic interventions, targeted digital inclusion strategies are essential to alter the opportunity structure for cybercrime. Originality/value This study provides novel, state-level evidence challenging the direct applicability of global criminological theories in the Indian context. It emphasizes that economic determinants of cybercrime are heavily filtered by digital access and capability, offering a more nuanced understanding for developing economies.