Corruption and firm growth: evidence from around the world

Raymond Fisman, Sergei Guriev, Carolin Ioramashvili and Alexander Plekhanov

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: We empirically investigate the relationship between corruption and growth using a firm-level dataset that is unique in scale, covering almost 88,000 firms across 141 economies in 2006–20, with wide-ranging corruption experiences. The scale and detail of our data allow us to explore the corruption-growth relationship at a very local level, within industries in a relatively narrow geography. We report three empirical regularities. First, firms that make zero informal payments tend to grow slower than bribers. Second, this result is driven by non-bribers in high-corruption countries. Third, among bribers, growth is decreasing in the amount of informal payments—in both high- and low-corruption countries. We suggest that this set of results may be reconciled with a simple model in which endogenously determined higher bribe rates lead to lower growth, while non-bribers are often excluded entirely from growth opportunities in high-corruption settings.

JEL-codes: D20 O12 (search for similar items in EconPapers)
Pages: 23 pages
Date: 2024-05-01
New Economics Papers: this item is included in nep-bec, nep-iue and nep-sbm
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Published in Economic Journal, 1, May, 2024, 134(660), pp. 1494 -1516. ISSN: 0013-0133

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https://researchonline.lse.ac.uk/id/eprint/123951/ Open access version. (application/pdf)

Related works:
Journal Article: Corruption and Firm Growth: Evidence from around the World (2024)
Working Paper: Corruption and Firm Growth: Evidence from around the World (2021)
Working Paper: Corruption and Firm Growth: Evidence from around the World (2021)
Working Paper: Corruption and Firm Growth: Evidence from around the World (2021)
Working Paper: Corruption and Firm Growth: Evidence from around the World (2021)
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