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Corruption and Firm Growth: Evidence from around the World

Author

Listed:
  • Raymond Fisman

    (BU - Boston University [Boston])

  • Sergei Guriev

    (ECON - Département d'économie (Sciences Po) - Sciences Po - Sciences Po - CNRS - Centre National de la Recherche Scientifique)

  • Carolin Ioramashvili

    (LSE - London School of Economics and Political Science)

  • Alexander Plekhanov

    (EBRD - European Bank for Reconstruction and Development - EBRD)

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.

Suggested Citation

  • Raymond Fisman & Sergei Guriev & Carolin Ioramashvili & Alexander Plekhanov, 2021. "Corruption and Firm Growth: Evidence from around the World," SciencePo Working papers Main hal-03385243, HAL.
    • Handle: RePEc:hal:spmain:hal-03385243
    Note: View the original document on HAL open archive server: https://sciencespo.hal.science/hal-03385243
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    Cited by:

    1. Di Giorno, Saverio & Dileo, Ivano & Busato, Francesco, 2024. "Shades of grand corruption among allocative efficiency and institutional settings. The case of Italy," Socio-Economic Planning Sciences, Elsevier, vol. 93(C).

    More about this item

    Keywords

    Corruption; Firm growth; Enterprise surveys;
    All these keywords.

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development

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