Service Offshoring and Corruption: Do Firms Escape Corrupt Countries?

Patrik Karpaty and Patrik Tingvall

Journal of Industry, Competition and Trade, 2015, vol. 15, issue 4, 363-381

Abstract: We analyze how service offshoring by Swedish firms is affected by corruption in source countries. The results suggest that firms avoid corrupt countries and that corruption reduces the volume of service offshoring. Analyzing firm heterogeneity, we find that large and internationalized firms are the ones that are the most sensitive to corruption. In addition, sensitivity to corruption tends to increase with falling income in source countries. These results suggest that the gains from reduced corruption may be the greatest for poor countries. Copyright Springer Science+Business Media New York 2015

Keywords: Corruption; Services; Offshoring; Gravity model; Firm level data; C23; D22; F23; L24 (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (7)

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DOI: 10.1007/s10842-015-0197-5

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