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Corruption and Market Competition: Evidence from Post-Communist Countries

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  • Diaby, Aboubacar
  • Sylwester, Kevin

Abstract

This paper empirically examines whether market competition is associated with greater bribe payments. We use firm-level data from the Business Environment and Enterprise Performance Surveys. Since market competition could be endogenous and some firms report zero bribes, we employ a tobit estimation methodology instrumenting for market competition. We find that greater market competition increases the amount of bribes paid. Results are robust across several measures of market competition. However, market competition is less strongly associated with bribes in the presence of other obstacles of doing business that could also lead to more bribes.

Suggested Citation

  • Diaby, Aboubacar & Sylwester, Kevin, 2015. "Corruption and Market Competition: Evidence from Post-Communist Countries," World Development, Elsevier, vol. 66(C), pages 487-499.
  • Handle: RePEc:eee:wdevel:v:66:y:2015:i:c:p:487-499
    DOI: 10.1016/j.worlddev.2014.09.003
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    References listed on IDEAS

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    Cited by:

    1. repec:spr:epolin:v:45:y:2018:i:1:d:10.1007_s40812-017-0086-5 is not listed on IDEAS
    2. Bassetti, Thomas & Dal Maso, Lorenzo & Lattanzi, Nicola, 2015. "Family businesses in Eastern European countries: How informal payments affect exports," Journal of Family Business Strategy, Elsevier, vol. 6(4), pages 219-233.
    3. Joël CARIOLLE, 2016. "The voracity and scarcity effects of export booms and busts on bribery," Working Papers P146, FERDI.
    4. Golovanova, Svetlana V. & Meleshkina, Anna I., 2016. "Estimation of Interrelation between Corruption and Competition," Economic Policy, Russian Presidential Academy of National Economy and Public Administration, vol. 6, pages 100-121, December.
    5. repec:gam:jadmsc:v:8:y:2018:i:2:p:12-:d:140399 is not listed on IDEAS
    6. Jetter, Michael & Agudelo, Alejandra Montoya & Hassan, Andrés Ramírez, 2015. "The Effect of Democracy on Corruption: Income is Key," World Development, Elsevier, vol. 74(C), pages 286-304.
    7. Pavlova, Natalia & Meleshkina, Anna, 2017. "Anti-Corruption and Protection of Competition," Working Papers 041707, Russian Presidential Academy of National Economy and Public Administration.

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