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The effect of corruption on economic growth in the BRICS countries. A panel data analysis

Siphiwo Bitterhout and Beatrice Desiree Simo-Kengne

Economic Development and Well-being Research Group Working Paper Series from University of Johannesburg, College of Business and Economics

Abstract: This paper examines the effect of corruption on economic growth in the BRICS countries using panel dataset spanning the period 1996 to 2014. Empirical results indicate that controlling for only heterogeneity (fixed effect) leads to a negative association between output growth and corruption index. However, when heterogeneity and endogeneity are accounted for (GMM specifications), the corruption index exhibits a positive and significant effect on economic growth. While this result is contrary to a large body of empirical evidence, bar a few, which has found corruption to have a detrimental impact on economic growth, the growth impact of corruption does indeed decreases with the level of corruption. This suggests a possible corruption level from which, the relation might lead to opposite effects.

Keywords: Corruption; Economic Growth and Panel Data (search for similar items in EconPapers)
JEL-codes: C23 D73 O40 (search for similar items in EconPapers)
Pages: 23 pages
Date: 2020, Revised 2020
New Economics Papers: this item is included in nep-cis and nep-gro
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https://edwrg.co.za/RePEc/ady/wpaper/Bitterhout-Si ... -Growth-In-BRICS.pdf First version, 2020 (application/pdf)

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