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Firm Development and Bribery: An Empirical Study from Latin America

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  • Ruohan Wu

    (University of North Georgia)

Abstract

This empirical research investigated how bribery by firms influences their development. The most recent firm-level data were acquired from four Latin American countries (Argentina, Bolivia, Paraguay, and Peru) and looked into the firms’ innovation capability. A translog function was used to estimate the firms’ productivity. Bribery was defined as informal payments by firms to public officials to “get things done”. In order to mitigate the endogeneity in the estimation, an instrumental variable was used for firms’ bribery payments. Bribery was found to have a significantly negative impact on both innovation capability and productivity of the observed firms. Other firm-level characteristics, such as government relationships, industry experience, participation in the global market, and number of employees, were also closely related to firm development.

Suggested Citation

  • Ruohan Wu, 2019. "Firm Development and Bribery: An Empirical Study from Latin America," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 47(1), pages 53-64, March.
    • Handle: RePEc:kap:atlecj:v:47:y:2019:i:1:d:10.1007_s11293-019-09609-6
    DOI: 10.1007/s11293-019-09609-6
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    Cited by:

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    2. Lurdes Martins & Jorge Cerdeira & Aurora A.C. Teixeira, 2020. "Does corruption boost or harm firms’ performance in developing and emerging economies? A firm‐level study," The World Economy, Wiley Blackwell, vol. 43(8), pages 2119-2152, August.
    3. Jorge Cerdeira & Diogo Lourenço, 2022. "Does Corruption Impact Firm Innovation? Evidence from Portugal," Economies, MDPI, vol. 10(7), pages 1-10, July.

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