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Corruption, growth, and growth volatility

  • Evrensel, Ayse Y.
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    While the existing studies focus on the corruption-growth relationship, this paper introduces a new focus involving corruption and growth volatility. The Ehrlich-Lui (1999) framework provides the theoretical background of the paper, which produces testable hypotheses regarding the corruption-growth and the corruption-growth volatility relationship. The cross-section dataset that is used in the empirical analysis contains 121 developed and developing countries. In terms of the relationship between the governance-related variables and growth rates, only corruption control and government effectiveness significantly and adversely affect the average growth rate. Regarding the relationship between growth volatility and governance-related variables, the results suggest that higher corruption control, expropriation risk control, government effectiveness, and government consumption decrease growth volatility.

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    File URL: http://www.sciencedirect.com/science/article/B6W4V-4X54JXG-3/2/e9827564db61efcaa88d5139c5c542f4
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    Article provided by Elsevier in its journal International Review of Economics & Finance.

    Volume (Year): 19 (2010)
    Issue (Month): 3 (June)
    Pages: 501-514

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    Handle: RePEc:eee:reveco:v:19:y:2010:i:3:p:501-514
    Contact details of provider: Web page: http://www.elsevier.com/locate/inca/620165

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