Corruption and Firm Growth: Evidence from around the World

Raymond Fisman, Sergei Guriev, Carolin Ioramashvili and Alexander Plekhanov

The Economic Journal, 2024, vol. 134, issue 660, 1494-1516

Abstract: We empirically investigate the relationship between corruption and growth using a firm-level dataset that is unique in scale, covering almost 88,000 firms across 141 economies in 2006–20, with wide-ranging corruption experiences. The scale and detail of our data allow us to explore the corruption-growth relationship at a very local level, within industries in a relatively narrow geography. We report three empirical regularities. First, firms that make zero informal payments tend to grow slower than bribers. Second, this result is driven by non-bribers in high-corruption countries. Third, among bribers, growth is decreasing in the amount of informal payments—in both high- and low-corruption countries. We suggest that this set of results may be reconciled with a simple model in which endogenously determined higher bribe rates lead to lower growth, while non-bribers are often excluded entirely from growth opportunities in high-corruption settings.

Date: 2024
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Related works:
Working Paper: Corruption and Firm Growth: Evidence from around the World (2021)
Working Paper: Corruption and Firm Growth: Evidence from around the World (2021)
Working Paper: Corruption and Firm Growth: Evidence from around the World (2021)
Working Paper: Corruption and Firm Growth: Evidence from around the World (2021)
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