Bribery solicitations and firm performance in the Latin America and Caribbean region

Murat Şeker and Judy Yang

Journal of Comparative Economics, 2014, vol. 42, issue 1, 246-264

Abstract: This study shows that for firms in the Latin America and Caribbean region, bribery significantly distorts firm growth. Firms that were solicited for bribes when conducting business transactions – such as applying for permits, electricity, or water connections – have 23% lower annual sales growth than firms that do not face such solicitations. Moreover, these distortions are more severe for low-revenue-generating and young firms. Using the instrumental variables method on cross-sectional data as well as evidence from panel data, the authors show that these results are robust to different specifications and the use of different sub-samples.

Keywords: Corruption; Bribery; Firm growth; Latin America and Caribbean region (search for similar items in EconPapers)
JEL-codes: D73 L2 O12 O17 (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (22)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jcecon:v:42:y:2014:i:1:p:246-264

DOI: 10.1016/j.jce.2013.05.004

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