New products and corruption: evidence from Indian firms
AbstractIt has been shown that corruption has a negative effect on firm productivity, but what about its impact on product innovation ? We find that corruption, functioning as a bribe tax, diminishes the probability of new product introduction. We use a World Bank Enterprise Survey from India in 2005, with 1600 firms answering if they introduced a new product to the firm and on the average quantity of bribe paid by firms. Controlling for innovation determinants, firm characteristics, location choice, multi-product firms and other business environment variables, sector-location bribe averages have a negative and significant impact on product innovation.
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Date of creation: May 2011
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Innovation; corruption; firm performance.;
Other versions of this item:
- Felipe Starosta de Waldemar, 2011. "New products and corruption: evidence from Indian firms," Documents de travail du Centre d'Economie de la Sorbonne 11033, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne.
- O31 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
- D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
- L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
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