IDEAS home Printed from https://ideas.repec.org/a/taf/applec/v46y2014i23p2833-2849.html

Is corruption grease, grit or a gamble? Corruption increases variance of productivity across countries

Author

Listed:
  • Antti Saastamoinen
  • Timo Kuosmanen

Abstract

The effect of corruption on economic growth has attracted interest in empirical development economics. The conventional view of corruption as impediment for growth has been challenged by the 'grease-on-the-wheels' hypothesis. We take a new perspective on the issue and suggest corruption as macro risk, referred to as a 'gamble' hypothesis. Using cross-country data and two alternative indicators of corruption, we find corruption to be a significant driver of heteroscedasticity in total productivity. This supports the new gamble hypothesis. We also note some misleading interpretations in the previously published frontier applications. To avoid these shortcomings, we apply a flexible semi-nonparametric estimator.

Suggested Citation

  • Antti Saastamoinen & Timo Kuosmanen, 2014. "Is corruption grease, grit or a gamble? Corruption increases variance of productivity across countries," Applied Economics, Taylor & Francis Journals, vol. 46(23), pages 2833-2849, August.
    • Handle: RePEc:taf:applec:v:46:y:2014:i:23:p:2833-2849
    DOI: 10.1080/00036846.2014.914149
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/00036846.2014.914149
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/00036846.2014.914149?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    References listed on IDEAS

    as
    1. Laurens Cherchye & Wim Moesen, 2003. "Institutional Infrastructure and Economic Performance: Levels versus Catching Up and Frontier Shifts," Public Economics Working Paper Series ces0314, Katholieke Universiteit Leuven, Centrum voor Economische Studiën, Working Group Public Economics.
    2. Robert E. Baldwin, 2004. "Openness and Growth: What's the Empirical Relationship?," NBER Chapters, in: Challenges to Globalization: Analyzing the Economics, pages 499-521, National Bureau of Economic Research, Inc.
    Full references (including those not matched with items on IDEAS)

    Citations

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


    Cited by:

    1. 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.
    2. Hien Thu Pham & Nhan Buu Phan & Shino Takayama, 2020. "Productivity, Efficiency and Firm Size Distribution: Evidence from Vietnam," Discussion Papers Series 617, School of Economics, University of Queensland, Australia.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Kym Anderson, 2005. "On the Virtues of Multilateral Trade Negotiations," The Economic Record, The Economic Society of Australia, vol. 81(255), pages 414-438, December.
    2. Dodzin, Sergei & Vamvakidis, Athanasios, 2004. "Trade and industrialization in developing economies," Journal of Development Economics, Elsevier, vol. 75(1), pages 319-328, October.
    3. He, Weijun & Wang, Bo & Danish, & Wang, Zhaohua, 2018. "Will regional economic integration influence carbon dioxide marginal abatement costs? Evidence from Chinese panel data," Energy Economics, Elsevier, vol. 74(C), pages 263-274.
    4. Kose, M. Ayhan & Prasad, Eswar S. & Terrones, Marco E., 2006. "How do trade and financial integration affect the relationship between growth and volatility?," Journal of International Economics, Elsevier, vol. 69(1), pages 176-202, June.
    5. Claudia Buch & Paola Monti, 2010. "Openness and income disparities: does trade explain the “Mezzogiorno effect”?," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 145(4), pages 667-688, January.
    6. Dong, Baomin & Gu, Xinhua & Song, Huasheng, 2017. "Capital market liberalization: Optimal tradeoff and bargaining delay," The North American Journal of Economics and Finance, Elsevier, vol. 39(C), pages 78-88.
    7. Rabah Arezki & Alou Adesse Dama & Grégoire Rota-Graziosi, 2021. "Working Paper 349 - Revisiting the Relationship between Trade Liberalization and Taxation," Working Paper Series 2475, African Development Bank.
    8. Ricardo E. Buitrago R., 2009. "Reformas comerciales (apertura) en América latina: revisando sus impactos en el crecimiento y el desarrollo," Revista Facultad de Ciencias Económicas, Universidad Militar Nueva Granada.
    9. James Cassing & Stephen Tokarick, 2007. "Trade and growth in the presence of distortions," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 16(4), pages 475-504.
    10. Buch, Claudia M. & Toubal, Farid, 2009. "Openness and growth: The long shadow of the Berlin Wall," Journal of Macroeconomics, Elsevier, vol. 31(3), pages 409-422, September.
    11. Eelke Jong & Roger Smeets & Jeroen Smits, 2006. "Culture and Openness," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 78(1), pages 111-136, August.
    12. Maria Jesus Herrerias & Vicente Orts, 2011. "The driving forces behind China’s growth," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 19(1), pages 79-124, January.
    13. Ma Salinas-Jiménez & Javier Salinas-Jiménez, 2011. "Corruption and total factor productivity: level or growth effects?," Portuguese Economic Journal, Springer;Instituto Superior de Economia e Gestao, vol. 10(2), pages 109-128, August.
    14. M. Ayhan Kose & Eswar S. Prasad & Marco E. Terrones, 2004. "How do trade and financial integration affect the relationship between growth and volatility?," Proceedings, Federal Reserve Bank of San Francisco, issue jun.
    15. repec:bla:rdevec:v:14:y:2010:i:s1:p:683-698 is not listed on IDEAS
    16. Mehdi Abbas, 2007. "Mondialisation, Organisation mondiale du commerce et rapports Nord-Sud : entre différenciation et espace politique pour le développement," Post-Print halshs-00263950, HAL.
    17. Cristina Balgar & Andreea Dragoi, 2014. "Major Determinants and Potential Impacts of FDI on Japan’s Economic Growth," Knowledge Horizons - Economics, Faculty of Finance, Banking and Accountancy Bucharest,"Dimitrie Cantemir" Christian University Bucharest, vol. 6(3), pages 160-164, September.
    18. J.Salcedo Cain & Rana Hasan & Devashish Mitra, 2010. "Trade Liberalization and Poverty Reduction: New Evidence from Indian States," Working Papers 3333, School of International and Public Affairs, Columbia University, revised Nov 2010.
    19. Salinas-Jimenez, M del Mar & Salinas-Jimenez, Javier, 2007. "Corruption, efficiency and productivity in OECD countries," Journal of Policy Modeling, Elsevier, vol. 29(6), pages 903-915.
    20. Atrayee Ghosh Roy, 2018. "Infrastructure Investment and the Indian Economy," Bulletin of Applied Economics, Risk Market Journals, vol. 5(1), pages 29-38.
    21. Mozammel Huq & Michael Tribe, 2004. "Economic development in a changing globalized economy," Journal of International Development, John Wiley & Sons, Ltd., vol. 16(7), pages 911-923.

    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:taf:applec:v:46:y:2014:i:23:p:2833-2849. See general information about how to correct material in RePEc.

    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.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with 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.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/RAEC20 .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.