New Products and Corruption: Evidence from Indian Firms

Felipe Starosta de Waldemar ()
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Felipe Starosta de Waldemar: CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique

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Abstract: It has been shown that corruption has a negative effect on firm growth, but what about its impact on product innovation? I find that corruption, functioning as a bribe tax, diminishes the probability of new products being introduced. I use a World Bank Enterprise Survey conducted in India in 2005, with 1,600 firms answering both whether they introduced a new product to the firm, and whether and how much was paid in bribes. Controlling for innovation determinants and firm characteristics, sector-state bribery averages have a negative and significant impact on product innovation.

Keywords: Bribe; Bribery; Corruption; Firm; Firms; Innovation (search for similar items in EconPapers)
Date: 2012-09
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Citations: View citations in EconPapers (33)

Published in Developing Economies, 2012, 50 (3), pp.268-284

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-00966301

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