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Does Anti-Corruption Facilitate Or Hinder Technological Innovation?

Author

Listed:
  • QIAN ZHAO

    (School of International Trade and Economics, Central University of Finance and Economics, Beijing 100081, P. R. China)

  • CHI-WEI SU

    (School of Economics, Qingdao University, Qingdao 266100, P. R. China)

Abstract

Innovation is a major economic growth contributor, which is often hindered by corruption. However, this relationship is not always supported. This study analyzes the interrelation between anti-corruption (AC) and technological innovation (TI) in China by applying the bootstrap rolling-window full-sample and subsample Granger causality test. The results confirm that the influence of AC on TI is two-fold. On the one hand, AC positively influences TI, indicating that it facilitates TI. This finding supports the “sanding-the-wheels†hypothesis, which postulates that corruption impedes innovation. On the other hand, there is a negative influence from AC to TI, which is mainly caused by the COVID-19 pandemic. Further, the results show that TI positively influences AC, implying that TI can affect government’s AC-related decisions. Based on these findings, governments should coordinate their efforts toward innovation and AC, while firms should adopt innovation-driven strategies for long-term growth.

Suggested Citation

  • Qian Zhao & Chi-Wei Su, 2024. "Does Anti-Corruption Facilitate Or Hinder Technological Innovation?," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 69(03), pages 1151-1169, June.
    • Handle: RePEc:wsi:serxxx:v:69:y:2024:i:03:n:s0217590823500297
    DOI: 10.1142/S0217590823500297
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    More about this item

    Keywords

    Anti-corruption; technological innovation; rolling-window; bootstrap;
    All these keywords.

    JEL classification:

    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D

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