Corruption, crime and investments by firms in emerging economies

Nicholas Addai Boamah, Francis Ofori-Yeboah and Martin Owusu-Ansah

Journal of Economic and Administrative Sciences, 2023, vol. 41, issue 3, 1220-1238

Abstract: PurposeThe study aims to investigate the effect of corruption and crime on the investments by firms in emerging economies (EEs).Design/methodology/approachThe study adopts the generalised methods of moments (GMM) estimator and data across 57 EEs.FindingsThe study shows that crime management, corruption and external quality assurance drive-up investments. Additionally, investments decline with firm age and crime incidence. Corruption and crime managements increase investments by exporting firms more than non-exporting firms investments. Also, external auditor services benefit investments by large firms more than small-medium firms.Originality/valueThere is a need for EEs to implement policies that will curtail corruption and create a level playing field and sustainable firm growth. EEs firms must be innovative to expand their productive investments and grow over time. Also, EEs firms should seek external quality certification, invest in internal security and monitor goods in transit.

Keywords: Investments; Crime management; Developing economies; Informal payments; Productive assets; Honesty (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:eme:jeaspp:jeas-08-2022-0200

DOI: 10.1108/JEAS-08-2022-0200

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