Analyses of Corruption and Productivity with Empirical Study in Vietnam

Nhan Buu Phany () and Shino Takayamaz ()
Additional contact information
Nhan Buu Phany: School of Economics, University of Queensland
Shino Takayamaz: School of Economics, University of Queensland

No 628, Discussion Papers Series from University of Queensland, School of Economics

Abstract: This paper develops a model to analyze bribery under heterogeneous firms’ productivity. In the static setting, we show that there are four possible regimes in equilibrium where firms’ bribery depends on their productivity and fundamental variables, including the state capacity. In the dynamic setting, we show that the regime in which more productive firms pay bribes converges to the regime with no bribery, while the regime where all firms pay bribes does not change. We also show that, unlike in the latter case, output increases over time in the former case. Finally, to test the validity of our theoretical results, we apply the methodology in Ackerberg et al. (2015) while including a bribery variable to a dataset of Vietnamese manufacturing firms between 2005 and 2015. We find a statistically significant and positive relationship between productivity and the likelihood of paying bribes, coinciding with one of the equilibrium regimes shown in our theoretical analysis.

Keywords: corruption; productivity (search for similar items in EconPapers)
JEL-codes: D21 D24 D73 (search for similar items in EconPapers)
Date: 2020-06-19
New Economics Papers: this item is included in nep-eff, nep-sea and nep-tra
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://economics.uq.edu.au/files/39681/628.pdf (application/pdf)

Related works:
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:qld:uq2004:628

Access Statistics for this paper

More papers in Discussion Papers Series from University of Queensland, School of Economics Contact information at EDIRC.
Bibliographic data for series maintained by SOE IT ().