Corruption and innovation: the importance of competition

Fatma Karaman Kabadurmus and Kevin Sylwester

International Journal of Emerging Markets, 2020, vol. 17, issue 3, 766-788

Abstract: Purpose - The purpose of this study is to examine how corruption affects the prevalence of product and process innovation by firms. Design/methodology/approach - This study uses firm-level data from the 2012–2016 Business Environment Enterprise Performance Surveys and utilizes a conditional mixed process model to address endogeneity concerns, taking bribery as a measure of corruption. Findings - The study shows that measures of bribery are positively and robustly associated with innovation but mainly for firms reporting many competitors. The results are stronger for firms reporting more obstacles. Both findings support the inference that bribes facilitate innovation by allowing firms to evade regulatory obstacles. Originality/value - The current research on corruption's effect on innovation restricts the association to be uniform across the sample, but this study shows that the impact depends on the degree of competition faced by a firm. In addition, the data used in this study cover 30 economies in Eastern Europe and Central Asia, and thus contributes to determining the effects of anticorruption practices in emerging countries.

Keywords: Innovation; Corruption; Market competition; EECA; BEEPS (search for similar items in EconPapers)
Date: 2020
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://www.emerald.com/insight/content/doi/10.110 ... d&utm_campaign=repec (text/html)
https://www.emerald.com/insight/content/doi/10.110 ... d&utm_campaign=repec (application/pdf)
Access to full text is restricted to subscribers

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:eme:ijoemp:ijoem-08-2019-0658

DOI: 10.1108/IJOEM-08-2019-0658

Access Statistics for this article

International Journal of Emerging Markets is currently edited by Prof Ilan Alon

More articles in International Journal of Emerging Markets from Emerald Group Publishing Limited
Bibliographic data for series maintained by Emerald Support ().