Does Pervasive Corruption Matter For Firm's Demand for Good Governance in Developing Countries?

Gaoussou Diarra () and Sébastien Marchand

No 201112, Working Papers from CERDI

Abstract: This paper investigates empirically the relationships between the corruption climate and the demand for good governance by focusing on firms' behaviors in developing countries. The concept of demand for good governance is conceived in terms of a firm's willingness to comply with regulatory norms measured through the firm's perception of the level of public accountability as well as the firm's behavior in terms of corruption practices. While there is a growing theoretical literature on the importance of externality mechanisms of corruption phenomena, little empirical evidences has been highlighted. This paper contributes to fill this gap by using firm-level data from the World Bank Enterprise Survey. We show that when corruption is found to be a very important constraint for a firm's business, its willingness to comply decreases and the probability of the firm's corrupting officials increases. These results support arguments according to which the demand for good governance is likely to be influenced by the perception of the existence of pervasive corruption. Moreover, the results are conditioned on countries' institutional features and the type of regulation. Some evidence is also found for firms' environmental overcompliance.

Keywords: Corruption; Compliance; Regulation; Firms (search for similar items in EconPapers)
JEL-codes: A12 A13 (search for similar items in EconPapers)
Pages: 32
Date: 2011
New Economics Papers: this item is included in nep-dev, nep-env and nep-reg
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://publi.cerdi.org/ed/2011/2011.12.pdf (application/pdf)
Our link check indicates that this URL is bad, the error code is: 404 Not Found (http://publi.cerdi.org/ed/2011/2011.12.pdf [301 Moved Permanently]--> https://publi.cerdi.org/ed/2011/2011.12.pdf)

Related works:
Working Paper: Does Pervasive Corruption Matter For Firm's Demand for Good Governance in Developing Countries? (2011)
Working Paper: Does Pervasive Corruption Matter For Firm's Demand for Good Governance in Developing Countries? (2011)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cdi:wpaper:1258

Access Statistics for this paper

More papers in Working Papers from CERDI Contact information at EDIRC.
Bibliographic data for series maintained by Vincent Mazenod ().