Does corruption ever help entrepreneurship?

Nabamita Dutta () and Russell Sobel

Small Business Economics, 2016, vol. 47, issue 1, No 10, 179-199

Abstract: Abstract The current literature contains mixed results regarding the impact of corruption on entrepreneurship and economic growth. In this paper, we examine a much larger set of countries and time periods to attempt to gain insights into this relationship. In particular, the central question is whether corruption can compensate for a bad business climate. Our results are clear; corruption hurts entrepreneurship. The impact is smaller, but remains negative, when business climates are bad. This is in contrast to previous literature that suggests corruption may increase entrepreneurship under a bad business climate. We find corruption never improves entrepreneurship; it simply hurts less when business climates are not conducive to growth in the first place.

Keywords: Entrepreneurship; Corruption; Business regulations; D73; L26; O43 (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (82)

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DOI: 10.1007/s11187-016-9728-7

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