Investment decisions and exposure to crime and corruption

Subika Farazi (), Ahmed Rostom () and Rishabh Sinha
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Subika Farazi: The World Bank
Ahmed Rostom: The World Bank

Economics Bulletin, 2020, vol. 40, issue 3, 2297-2303

Abstract: Using firm-level data from Afghanistan, we find that undertaking investment raises the likelihood of experiencing episodes of crime and corruption. Our analysis suggests that firms more prone to criminal attacks are aware of the risks and accordingly make costly security arrangements to mitigate the impact. The likelihood of security spending is higher for formal firms and those having access to finance. The two policy instruments increase the availability of resources, some of which is spent to fight crime.

Keywords: Conflict; Corruption; Investment; Afghanistan; Firms (search for similar items in EconPapers)
JEL-codes: D2 D7 (search for similar items in EconPapers)
Date: 2020-08-19
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Citations: View citations in EconPapers (1)

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