IDEAS home Printed from https://ideas.repec.org/a/mes/eaeuec/v50y2012i6p5-27.html
   My bibliography  Save this article

Corruption and Firm Performance

Author

Listed:
  • Narek Sahakyan
  • Kyle W. Stiegert

Abstract

Most empirical research on the subject of corruption has found evidence of its deleterious effects on firms, industries, and society in general. Yet the persistence of corruption, which is present in virtually every form of public governance, suggests that the disparate benefits are difficult to unravel and lead to support for the status quo. In this paper, the authors analyze survey data from over 400 Armenian businesses to study the perceived favorability and impact of corruption on firm-level performance. The research relies on the data from two ordered response survey questions on corruption that were collected as part of a broad survey of issues facing firms pertaining to competition and industry structure. The dual role of the perceived favorability and degree of impact of corruption are modeled in a seemingly unrelated bivariate ordered probit framework. We find that corruption is perceived as more favorable among firms that (1) do not face significant competition, (2) are relatively larger, and (3) younger. Personal characteristics of the respondents, except for the level of education, explain neither the perceived favorability nor impact of corruption. The results show that the model has high predictive power. Our results suggest that enforcement of antitrust policies, encouragement of polices that foster competition, and possibly nonprotectionist trade policies will assist in the battle against corruption.

Suggested Citation

  • Narek Sahakyan & Kyle W. Stiegert, 2012. "Corruption and Firm Performance," Eastern European Economics, Taylor & Francis Journals, vol. 50(6), pages 5-27, November.
  • Handle: RePEc:mes:eaeuec:v:50:y:2012:i:6:p:5-27
    as

    Download full text from publisher

    File URL: http://mesharpe.metapress.com/link.asp?target=contribution&id=962854623548HK18
    Download Restriction: Access to full text is restricted to subscribers.

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Ozlem KUTLU FURTUNA, 2016. "The Nexus between Discretionary Expenditures and Corruption: Industry Level Perspectives from BRIC and Turkey," Proceedings of Business and Management Conferences 4406932, International Institute of Social and Economic Sciences.
    2. Baumann Florian & Friehe Tim, 2016. "Competitive Pressure and Corporate Crime," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 16(2), pages 647-687, April.
    3. 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.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:mes:eaeuec:v:50:y:2012:i:6:p:5-27. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Chris Longhurst). General contact details of provider: http://www.tandfonline.com/MEEE20 .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.