Corruption and Firm Performance in Africa
AbstractThis paper uses survey data to investigate empirically the importance of corruption in determining firm performance in Africa. We allow for the possibility of perception bias on the part of the respondents and for corruption being endogenous. We find that corruption is linked to significant adverse effects on firm performance in two ways. At the firm (or â€œlocalâ€) level, companies that pay bribes have 20 percent lower levels of output per worker. At the economywide (or â€œglobalâ€) level, firms in countries with pervasive corruption are some 70 per cent less efficient than firms in countries free of corruption. We thus provide evidence that competitive uncoordinated local corruption has substantial global effects.
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Bibliographic InfoPaper provided by University of Oxford, Department of Economics in its series Economics Series Working Papers with number WPS/2002-10.
Date of creation: 01 Dec 2002
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