EconPapers    
Economics at your fingertips  
 

Evaluating the impacts of corruption on firm performance in developing economies: an institutional perspective

Colin Williams () and Alvaro Martinez-Perez

International Journal of Business and Globalisation, 2016, vol. 16, issue 4, 401-422

Abstract: Conventionally, corruption is viewed as deleterious to firm performance. Analysing World Bank Enterprise Survey firm-level data across 132 countries and controlling for other firm performance determinants, this paper finds that paying corrupt public officials enhances firm performance. This is argued to be because developing economies are characterised by formal institutional imperfections (e.g., inefficient public administration and the weak rule of law). Making bribe payments compensates for these formal institutional imperfections. Examining the policy implications of this rational economic act for entrepreneurs, but which is deleterious at the aggregate country level for economic development and growth, the argument is that public authorities should shift away from increasing the costs of corruption by improving the risks of detection and penalties, and instead focus upon the formal institutional imperfections that lead to endemic corruption in the developing world.

Keywords: entrepreneurship; corruption; bribery; productivity; institutional theory; firm performance; emerging economies; developing countries; corrupt public officials; public administration; rule of law. (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations Track citations by RSS feed

Downloads: (external link)
http://www.inderscience.com/link.php?id=76845 (text/html)
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:ids:ijbglo:v:16:y:2016:i:4:p:401-422

Access Statistics for this article

More articles in International Journal of Business and Globalisation from Inderscience Enterprises Ltd
Series data maintained by Darren Simpson ().

 
Page updated 2017-12-14
Handle: RePEc:ids:ijbglo:v:16:y:2016:i:4:p:401-422