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The Impacts Of Corruption On Firm Performance: Some Lessons From 40 African Countries

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  • COLIN C. WILLIAMS

    (Sheffield University Management School (SUMS), University of Sheffield, Conduit Road, Sheffield S10 1FL, United Kingdom)

  • ABBI M. KEDIR

    (Sheffield University Management School (SUMS), University of Sheffield, Conduit Road, Sheffield S10 1FL, United Kingdom)

Abstract

The current evidence-base regarding the impacts of corruption on firm performance is based largely on studies of individual countries and contains mixed results. Therefore, the aim of this paper is to achieve a better insight into this relationship by reporting the results of a firm-level analysis of the impacts of corruption on firm performance using World Bank Enterprise Survey (WBES) data across 40 African countries. The clear result is that corruption significantly enhances rather than harms annual sales, employment and productivity growth rates. The outcome is to re-theorize participation in acts of corruption as beneficial for the individual firms engaged in such activity, while recognizing the wider evidence that this is not an optimal strategy at the aggregate country level. The outcome will be to advance knowledge about how corruption needs to be tackled. To eliminate corruption, it is shown here to be necessary for public authorities to recognize that corruption is an efficient strategy at the firm level and to adopt measures to alter the cost/benefit ratio confronting individual enterprises, and at the same time, to address the country-level formal institutional deficiencies that characterize many developing countries and result in the prevalence of corruption.

Suggested Citation

  • 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.
    • Handle: RePEc:wsi:jdexxx:v:21:y:2016:i:04:n:s1084946716500229
    DOI: 10.1142/S1084946716500229
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    3. Chei Bukari & Emm anuel Atta Anaman, 2021. "Corruption and firm innovation: a grease or sand in the wheels of commerce? Evidence from lower-middle and upper-middle income economies," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 11(2), pages 267-302, June.
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    10. Charles Ackah & Holger Goerg & Aoife Hanley & Cecília Hornok, 2020. "Why are Africa’s female entrepreneurs not playing the export game? Evidence from Ghana," Discussion Papers 2020-19, University of Nottingham, GEP.
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