Firm-Level Corruption in Vietnam
AbstractThis paper uses a unique panel dataset on firm-level corruption. It contains quantitative information on bribe payments by a sample of formal and informal Vietnamese firms. We show that bribe incidence is highly associated with firm-level differences in (i) visibility, (ii) sunk costs, (iii) ability to pay, and (iv) level of interaction with public officials. Moreover, when informal firms become formal the probability of paying bribes increases. Becoming formal is also associated with a revenue growth premium that is not driven by self-selection of well-performing firms. On average, this premium outweighs the additional bribe cost of formalization. Formalization embodies net benefits in spite of the growth hampering effects of bribes.
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Bibliographic InfoPaper provided by World Institute for Development Economic Research (UNU-WIDER) in its series Working Paper Series with number UNU-WIDER Working Paper WP2010/16.
Length: 23 pages
Date of creation: 2010
Date of revision:
firm performance; corruption; Vietnam;
Other versions of this item:
- NEP-ALL-2010-03-13 (All new papers)
- NEP-DEV-2010-03-13 (Development)
- NEP-TRA-2010-03-13 (Transition Economics)
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