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Does corruption ever help entrepreneurship?

Author

Listed:
  • Nabamita Dutta

    () (University of Wisconsin)

  • Russell Sobel

    () (The Citadel)

Abstract

Abstract The current literature contains mixed results regarding the impact of corruption on entrepreneurship and economic growth. In this paper, we examine a much larger set of countries and time periods to attempt to gain insights into this relationship. In particular, the central question is whether corruption can compensate for a bad business climate. Our results are clear; corruption hurts entrepreneurship. The impact is smaller, but remains negative, when business climates are bad. This is in contrast to previous literature that suggests corruption may increase entrepreneurship under a bad business climate. We find corruption never improves entrepreneurship; it simply hurts less when business climates are not conducive to growth in the first place.

Suggested Citation

  • Nabamita Dutta & Russell Sobel, 2016. "Does corruption ever help entrepreneurship?," Small Business Economics, Springer, vol. 47(1), pages 179-199, June.
  • Handle: RePEc:kap:sbusec:v:47:y:2016:i:1:d:10.1007_s11187-016-9728-7
    DOI: 10.1007/s11187-016-9728-7
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    References listed on IDEAS

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    Cited by:

    1. Besnik A. Krasniqi & Sameeksha Desai, 2016. "Institutional drivers of high-growth firms: country-level evidence from 26 transition economies," Small Business Economics, Springer, vol. 47(4), pages 1075-1094, December.
    2. José Ernesto Amorós Espinosa & Luciano Ciravegna & Vesna Mandakovic & Pekka Stenmolm, 2017. "Necessity or opportunity? the effects of State fragility and economic development on entrepreneurial efforts," Serie Working Papers 42, Universidad del Desarrollo, School of Business and Economics.
    3. repec:eee:ecmode:v:71:y:2018:i:c:p:263-271 is not listed on IDEAS
    4. Colin C. Williams & Abbi M. Kedir, 2016. "The Impacts Of Corruption On Firm Performance: Some Lessons From 40 African Countries," Journal of Developmental Entrepreneurship (JDE), World Scientific Publishing Co. Pte. Ltd., vol. 21(04), pages 1-18, December.
    5. repec:bla:ecinqu:v:55:y:2017:i:1:p:137-159 is not listed on IDEAS
    6. repec:kap:sbusec:v:49:y:2017:i:1:d:10.1007_s11187-016-9822-x is not listed on IDEAS
    7. repec:eee:jobuve:v:8:y:2017:i:c:p:50-55 is not listed on IDEAS

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