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Corruption's Effect on Business Venturing Within the United States

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  • David T. Mitchell
  • Noel D. Campbell

Abstract

In developing countries with high levels of corruption, people are often forced into small‐business venturing or survivalist entrepreneurship because larger, more efficient firms do not exist. In developed countries, however, low corruption means that people choose entrepreneurship as a better means of innovating. In this article we use federal convictions of state and local officials and the Small Business Administration's firm formation data to test whether corruption within the United States forces some people into business venturing. We find that business venturing within the United States is caused in part by corruption.

Suggested Citation

  • David T. Mitchell & Noel D. Campbell, 2009. "Corruption's Effect on Business Venturing Within the United States," American Journal of Economics and Sociology, Wiley Blackwell, vol. 68(5), pages 1135-1152, November.
    • Handle: RePEc:bla:ajecsc:v:68:y:2009:i:5:p:1135-1152
    DOI: 10.1111/j.1536-7150.2009.00665.x
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    Cited by:

    1. Andres Jauregui & Kirk C. Heriot & David T. Mitchell, 2021. "Corruption and formal-sector entrepreneurship in a middle-income country: spatial analysis of firm births in the Mexican states," Small Business Economics, Springer, vol. 57(4), pages 1957-1972, December.
    2. Francesco Decarolis & Cristina Giorgiantonio, 2020. "Corruption red flags in public procurement: new evidence from Italian calls for tenders," Questioni di Economia e Finanza (Occasional Papers) 544, Bank of Italy, Economic Research and International Relations Area.
    3. Noel Campbell & Adriana S. Cordis, 2014. "Expected corruption and business formation," Journal of Entrepreneurship and Public Policy, Emerald Group Publishing Limited, vol. 3(2), pages 292-305, October.
    4. Nageri Kamaldeen Ibraheem & Gunu Umar, 2020. "Corruption and Ease of Doing Business: Evidence from ECOWAS," Acta Universitatis Sapientiae, Economics and Business, Sciendo, vol. 8(1), pages 19-37, October.
    5. Neiva de Figueiredo, João, 2013. "Are corruption levels accurately identified? The case of U.S. states," Journal of Policy Modeling, Elsevier, vol. 35(1), pages 134-149.
    6. Jamie Bologna & Amanda Ross, 2015. "Corruption and Entrepreneurship: Evidence from a Random Audit Program," Working Papers 15-05, Department of Economics, West Virginia University.
    7. Ali Hussein Samadi, 2019. "Institutions and entrepreneurship: unidirectional or bidirectional causality?," Journal of Global Entrepreneurship Research, Springer;UNESCO Chair in Entrepreneurship, vol. 9(1), pages 1-16, December.

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