Greasing the Wheels? The Effect of Corruption in Regulated Manufacturing Sectors of India

Takahiro Sato and Atsushi Kato
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Atsushi Kato: School of Business, Aoyama Gakuin University

No DP2014-07, Discussion Paper Series from Research Institute for Economics & Business Administration, Kobe University

Abstract: We investigate whether corruption “greases the wheels” of bureaucracies and enhances economic performance. Specifically, we examine the interaction effect of corruption and regulation on the economic performance of manufacturing industries in India. Our estimation results show that the combination of corruption and regulation has significant positive effects on gross value added per worker, total factor productivity, and capital labor ratio. This indicates the existence of a “greasing the wheels” effect.

Keywords: corruption; regulation; gross value added per worker; TFP (search for similar items in EconPapers)
JEL-codes: D73 K23 K42 L52 (search for similar items in EconPapers)
Pages: 37 pages
Date: 2014-03
New Economics Papers: this item is included in nep-eff and nep-law
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Citations: View citations in EconPapers (10)

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