The Impact of Bribery on Firm Performance: Evidence from Central and Eastern European Countries
I examine the relation between bureaucratic corruption ('to get things done') and firm performance in Central and Eastern European countries. While previous re- search relies on data from the BEEPS survey, which suffers from excessive non- reporting of corporate performance, I combine the information on bribery practices from the BEEPS with reliable firm performance data from the Amadeus database. The estimates, identified from within-firm variation, suggest that bureaucratic cor- ruption negatively affects both the sales and labor productivity growth of firms. However, conditional on a given level of bribery in a narrowly defined local market, a higher dispersion of firms' bribing behavior within such a market appears to facili- tate firm performance. I provide an explanation for this finding and also investigate the effect of bribery with respect to the heterogeneity of firms in terms of their size, inclusion in the manufacturing or service sector, stability, and countries' overall in- stitutional environments.
|Date of creation:||Dec 2012|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: (+420) 224 005 123
Fax: (+420) 224 005 333
Web page: http://www.cerge-ei.cz
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Klapper, Leora & Laeven, Luc & Rajan, Raghuram, 2006. "Entry regulation as a barrier to entrepreneurship," Journal of Financial Economics, Elsevier, vol. 82(3), pages 591-629, December.
- Lui, Francis T, 1985. "An Equilibrium Queuing Model of Bribery," Journal of Political Economy, University of Chicago Press, vol. 93(4), pages 760-81, August.
- Reyes Aterido & Mary Hallward-Driemeier & Carmen Pag�s, 2011.
"Big Constraints to Small Firms’ Growth? Business Environment and Employment Growth across Firms,"
Economic Development and Cultural Change,
University of Chicago Press, vol. 59(3), pages 609 - 647.
- Aterido, Reyes & Hallward-Driemeier, Mary & Pages, Carmen, 2009. "Big constraints to small firms'growth ? business environment and employment growth across firms," Policy Research Working Paper Series 5032, The World Bank.
- Del Carpio, Ximena & Nguyen, Ha & Wang, Liang Choon, 2012. "Does the minimum wage affect employment ? evidence from the manufacturing sector in Indonesia," Policy Research Working Paper Series 6147, The World Bank.
- Mauro, Paolo, 1995. "Corruption and Growth," The Quarterly Journal of Economics, MIT Press, vol. 110(3), pages 681-712, August.
- Arellano, Manuel & Bond, Stephen, 1991.
"Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations,"
Review of Economic Studies,
Wiley Blackwell, vol. 58(2), pages 277-97, April.
- Tom Doan, . "RATS program to replicate Arellano-Bond 1991 dynamic panel," Statistical Software Components RTZ00169, Boston College Department of Economics.
- Jakob Svensson, 2003.
"Who Must Pay Bribes And How Much? Evidence From A Cross Section Of Firms,"
The Quarterly Journal of Economics,
MIT Press, vol. 118(1), pages 207-230, February.
- Svensson, Jakob, 2000. "Who must pay bribes and how much? Evidence from a cross-section of firms," Policy Research Working Paper Series 2486, The World Bank.
- Svensson, Jakob, 2002. "Who Must Pay Bribes and How Much? Evidence from a cross-section of firms," Seminar Papers 713, Stockholm University, Institute for International Economic Studies.
- Acemoglu, D. & Verdier, T., 1997.
"The Choice between Market Failures and Corruption,"
DELTA Working Papers
97-06, DELTA (Ecole normale supérieure).
- Beck, Paul J. & Maher, Michael W., 1986. "A comparison of bribery and bidding in thin markets," Economics Letters, Elsevier, vol. 20(1), pages 1-5.
- Kevin M. Murphy & Andrei Shleifer & Robert W. Vishny, 1990.
"The Allocation of Talent: Implicationsfor Growth,"
University of Chicago - George G. Stigler Center for Study of Economy and State
65, Chicago - Center for Study of Economy and State.
- Kaufmann, Daniel, 2005. "Myths and Realities of Governance and Corruption," MPRA Paper 8089, University Library of Munich, Germany.
- Jan Hanousek & Evžen Kočenda & Jan Svejnar, 2007.
"Origin and concentration,"
The Economics of Transition,
The European Bank for Reconstruction and Development, vol. 15(1), pages 1-31, 03.
- Jan Hanousek & Evzen Kocenda & Jan Svejnar, 2005. "Origin and Concentration: Corporate Ownership, Control and Performance," CERGE-EI Working Papers wp259, The Center for Economic Research and Graduate Education - Economic Institute, Prague.
- Donato De Rosa & Nishaal Gooroochurn & Holger Görg, 2010.
"Corruption and Productivity Firm-level Evidence from the BEEPS Survey,"
Kiel Working Papers
1632, Kiel Institute for the World Economy.
- De Rosa, Donato & Gooroochurn, Nishaal & Gorg, Holger, 2010. "Corruption and productivity : firm-level evidence from the BEEPS survey," Policy Research Working Paper Series 5348, The World Bank.
- Zvi Griliches & Jerry A. Hausman, 1984.
"Errors in Variables in Panel Data,"
NBER Technical Working Papers
0037, National Bureau of Economic Research, Inc.
- Kinda, Tidiane & Plane, Patrick & Veganzones-Varoudakis, Marie-Ange, 2009. "Firms'productive performance and the investment climate in developing economies : an application to MENA manufacturing," Policy Research Working Paper Series 4869, The World Bank.
- Campos, Nauro F & Dimova, Ralitza & Saleh, Ahmad, 2010.
"Whither Corruption? A Quantitative Survey of the Literature on Corruption and Growth,"
CEPR Discussion Papers
8140, C.E.P.R. Discussion Papers.
- Campos, Nauro F & Dimova, Ralitza & Saleh, Ahmad, 2010. "Whither Corruption? A Quantitative Survey of the Literature on Corruption and Growth," IZA Discussion Papers 5334, Institute for the Study of Labor (IZA).
- Vial, Virginie & Hanoteau, Julien, 2010. "Corruption, Manufacturing Plant Growth, and the Asian Paradox: Indonesian Evidence," World Development, Elsevier, vol. 38(5), pages 693-705, May.
- Bliss, Christopher & Di Tella, Rafael, 1997. "Does Competition Kill Corruption?," Journal of Political Economy, University of Chicago Press, vol. 105(5), pages 1001-23, October.
- Jakob Svensson, 2005. "Eight Questions about Corruption," Journal of Economic Perspectives, American Economic Association, vol. 19(3), pages 19-42, Summer.
- Nathan M Jensen & Quan Li & Aminur Rahman, 2010. "Understanding corruption and firm responses in cross-national firm-level surveys," Journal of International Business Studies, Palgrave Macmillan, vol. 41(9), pages 1481-1504, December.
- Infante, Davide & Smirnova, Janna, 2009. "Rent-seeking under a weak institutional environment," Economics Letters, Elsevier, vol. 104(3), pages 118-121, September.
- Fisman, Raymond & Svensson, Jakob, 2000.
"Are corruption and taxation really harmful to growth? - firm-level evidence,"
Policy Research Working Paper Series
2485, The World Bank.
- Fisman, Raymond & Svensson, Jakob, 2007. "Are corruption and taxation really harmful to growth? Firm level evidence," Journal of Development Economics, Elsevier, vol. 83(1), pages 63-75, May.
- Evans, David S, 1987.
"Tests of Alternative Theories of Firm Growth,"
Journal of Political Economy,
University of Chicago Press, vol. 95(4), pages 657-74, August.
- Hanousek, Jan & Palda, Filip, 2007.
"Is there a Displacement Deadweight Loss from Tax Evasion? Estimates Using Firm Surveys from the Czech Republic,"
3911, University Library of Munich, Germany.
- Jan Hanousek & Filip Palda, 2009. "Is there a displacement deadweight loss from tax evasion? Estimates using firm surveys from the Czech Republic," Economic Change and Restructuring, Springer, vol. 42(3), pages 139-158, August.
- Drugov, Mikhail, 2010. "Competition in bureaucracy and corruption," Journal of Development Economics, Elsevier, vol. 92(2), pages 107-114, July.
- Jain, Arvind K, 2001. " Corruption: A Review," Journal of Economic Surveys, Wiley Blackwell, vol. 15(1), pages 71-121, February.
- Albert de Vaal & Wouter Ebben, 2011. "Institutions and the Relation between Corruption and Economic Growth," Review of Development Economics, Wiley Blackwell, vol. 15(1), pages 108-123, 02.
- Amal Sanyal, 2004. "Bribes in a Supply Line," Economica, London School of Economics and Political Science, vol. 71, pages 155-168, 02.
When requesting a correction, please mention this item's handle: RePEc:cer:papers:wp473. 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: (Jana Koudelkova)
If references are entirely missing, you can add them using this form.