Corruption and Firm Growth: Evidence from around the World

Raymond Fisman, Sergei Guriev, Carolin Ioramashvili and Alexander Plekhanov
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Carolin Ioramashvili: LSE - London School of Economics and Political Science
Alexander Plekhanov: EBRD - European Bank for Reconstruction and Development - EBRD

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Abstract: We empirically investigate the relationship between corruption and growth using a firm-level data set that is unique in scale, covering almost 88,000 firms across 141 economies in 2006-2020, 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.

Keywords: Corruption; Firm growth; Enterprise surveys (search for similar items in EconPapers)
Date: 2021-04-01
New Economics Papers: this item is included in nep-dem and nep-sbm
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Related works:
Journal Article: Corruption and Firm Growth: Evidence from around the World (2024)
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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