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Corruption, firm growth and export propensity in Kenya

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  • Peter Kimuyu

Abstract

Purpose - This paper draws from research that sought to explore the structure of corruption in Kenya and its implications on the performance of firms. Design/methodology/approach - The research takes the form of descriptive and econometrics analyses of Investment Climate Assessment data sets. Findings - Kenyan manufacturers spent significant proportions of their annual sales on unofficial payments including kick‐backs on government contracts. There is also evidence of co‐movement between such unofficial payments and red‐tape, suggesting that corruption does not play any greasing function. Not only does corruption undermine firm growth but also reduces the propensity to export. The findings uphold others that demonstrate the deleterious consequences of corruption. Research limitations/implications - Further work is needed in tidying up the methods of collecting corruption data. Although a battery of strategies was used to reduce potential response biases common in corruption data, the information leans towards perceptions so that the findings remain tentative. Practical implications - The results should be of interest to policy makers and researchers and should put the fight against corruption on a firmer footing. Originality/value - The paper establishes that corruption undermines the performance of firms.

Suggested Citation

  • Peter Kimuyu, 2007. "Corruption, firm growth and export propensity in Kenya," International Journal of Social Economics, Emerald Group Publishing Limited, vol. 34(3), pages 197-217, February.
    • Handle: RePEc:eme:ijsepp:v:34:y:2007:i:3:p:197-217
    DOI: 10.1108/03068290710726748
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    References listed on IDEAS

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    1. Marcouiller, Douglas & Young, Leslie, 1995. "The Black Hole of Graft: The Predatory State and the Informal Economy," American Economic Review, American Economic Association, vol. 85(3), pages 630-646, June.
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    Citations

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    Cited by:

    1. Gaygysyz Ashyrov & Jaan Masso, 2020. "Does corruption affect local and foreign-owned companies differently? Evidence from the BEEPS survey," Post-Communist Economies, Taylor & Francis Journals, vol. 32(3), pages 306-329, April.
    2. Nadine Levratto & Clarisse Nguedam Ntouko & Maarouf Ramadan, 2017. "Institutions and firms’ internationalization: an empirical analysis on three Middle East countries," EconomiX Working Papers 2017-37, University of Paris Nanterre, EconomiX.
    3. Miriti Jane Kinya & Kenneth Lawrence Wanjau & Humphrey R. Omondi, 2018. "Client Selection Criteria and Performance of Incubator Centers in Kenya: A Resource based Approach," International Journal of Research in Business and Social Science (2147-4478), Center for the Strategic Studies in Business and Finance, vol. 7(1), pages 25-34, January.
    4. Al-Kwifi, Osama Sam & Frankwick, Gary L. & Ahmed, Zafar U., 2020. "Achieving rapid internationalization of sub-Saharan African firms: Ethiopian Airlines' operations under challenging conditions," Journal of Business Research, Elsevier, vol. 119(C), pages 663-673.
    5. Andrew Hodge & Sriram Shankar & D. S. Prasada Rao & Alan Duhs, 2011. "Exploring the Links Between Corruption and Growth," Review of Development Economics, Wiley Blackwell, vol. 15(3), pages 474-490, August.
    6. Hasan A. Faruq, 2017. "Corruption, product complexity and African exporters," Applied Economics, Taylor & Francis Journals, vol. 49(6), pages 534-546, February.
    7. Ruohan Wu, 2019. "Firm Development and Bribery: An Empirical Study from Latin America," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 47(1), pages 53-64, March.
    8. Qi, Guoyou & Zou, Hailiang & Xie, Xuemei & Meng, Xiaohua & Fan, Tijun & Cao, Yuanhe, 2020. "Obedience or escape: Examining the contingency influences of corruption on firm exports," Journal of Business Research, Elsevier, vol. 106(C), pages 261-272.
    9. Hamdi, Helmi & Hakimi, Abdelaziz, 2015. "Corruption, FDI and Growth: All the truths of a corrupted regime before and after the social upsurge in Tunisia," MPRA Paper 63748, University Library of Munich, Germany.
    10. Michel Dion, 2011. "Corruption, fraud and cybercrime as dehumanizing phenomena," International Journal of Social Economics, Emerald Group Publishing Limited, vol. 38(5), pages 466-476, April.
    11. Nadine Levratto & Clarisse Nguedam Ntouko & Maarouf Ramadan, 2017. "Institutions and firms' internationalization: an empirical analysis on three Middle East countries [Institutions et internationalisation des entreprises: une analyse empirique sur trois pays du moy," Working Papers hal-04141631, HAL.
    12. Wolday Amha & Tadele Ferede & Mulat Demeke, 2014. "The Impact of Financial Access on Firm Growth: evidence from Ethiopian Grain Traders and Millers," Ethiopian Journal of Economics, Ethiopian Economics Association, vol. 22(1), November.
    13. Hasan A. Faruq & Margaret L. Weidner, 2018. "Culture, Institutions, and Firm Performance," Eastern Economic Journal, Palgrave Macmillan;Eastern Economic Association, vol. 44(4), pages 519-534, September.

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