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Bribery Environment and Firm Performance: Evidence from Central and Eastern European Countries

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  • Hanousek, Jan
  • Kochanova, Anna

Abstract

We examine the relation between bureaucratic corruption and firm performance in CEE countries. While previous research uses data from BEEPS, which suffers from excessive non-reporting of corporate performance, we combine reliable firm financials from the Amadeus database with information on bribery practices from BEEPS. We show that differing consequences of corruption found in previous studies could be explained by the corruption environment in which a firm operates. Basically, higher mean bribery is associated with lower performance, while higher dispersion of individual firm bribes appears to facilitate firm performance. A detailed analysis is conducted by firm sector and size, and countries? institutional environments.

Suggested Citation

  • Hanousek, Jan & Kochanova, Anna, 2015. "Bribery Environment and Firm Performance: Evidence from Central and Eastern European Countries," CEPR Discussion Papers 10499, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:10499
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    2. Claire Giordano, Paloma Lopez-Garcia, 2018. "Is corruption efficiency-enhancing? A case study of the Central and Eastern European region," European Journal of Comparative Economics, Cattaneo University (LIUC), vol. 15(1), pages 119-164, June.
    3. Masuch, Klaus & Anderton, Robert & Setzer, Ralph & Benalal, Nicholai, 2018. "Structural policies in the euro area," Occasional Paper Series 210, European Central Bank.
    4. Ewa Cichowicz & Ewa Rollnik-Sadowska, 2018. "Inclusive Growth in CEE Countries as a Determinant of Sustainable Development," Sustainability, MDPI, vol. 10(11), pages 1-23, October.
    5. Xiang Deng & Xiang Cheng & Jing Gu & Zeshui Xu, 2021. "An Innovative Indicator System and Group Decision Framework for Assessing Sustainable Development Enterprises," Group Decision and Negotiation, Springer, vol. 30(6), pages 1201-1238, December.
    6. Hanousek, Jan & Shamshur, Anastasiya & Tresl, Jiri, 2015. "Is bread gained by deceit sweet to a man? Corruption and firm efficiency," CEPR Discussion Papers 10951, C.E.P.R. Discussion Papers.
    7. Elisa Gamberoni & Christine Gartner & Claire Giordano & Paloma Lopez-Garcia, 2016. "Is corruption efficiency-enhancing? A case study of nine Central and Eastern European countries," Questioni di Economia e Finanza (Occasional Papers) 331, Bank of Italy, Economic Research and International Relations Area.
    8. Raymond Adegboyega, 2017. "Corruption and Economic Growth in Nigeria: A Cointegration (FM-OLS) Approach," Annals of the University of Petrosani, Economics, University of Petrosani, Romania, vol. 17(1), pages 5-18.
    9. Doytch, Nadia & Uctum, Merih, 2019. "Spillovers from foreign direct investment in services: Evidence at sub-sectoral level for the Asia-Pacific," Journal of Asian Economics, Elsevier, vol. 60(C), pages 33-44.

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    More about this item

    Keywords

    Bureaucratic corruption; Cee countries; Firm bribing behavior; Firm performance;
    All these keywords.

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • P37 - Political Economy and Comparative Economic Systems - - Socialist Institutions and Their Transitions - - - Legal

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